71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 2468
Senate Bill 611
Sponsored by COMMITTEE ON BUSINESS, LABOR, AND ECONOMIC
DEVELOPMENT (at the request of Oregon Restaurant Association)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Exempts employers from liability for unemployment insurance
taxes on wages paid to employee under 18 years of age.
A BILL FOR AN ACT
Relating to unemployment insurance taxes; creating new
provisions; and amending ORS 657.505.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 657.505 is amended to read:
657.505. (1) On and after January 1, 1936, taxes shall be
payable by each employer then subject to this chapter. Taxes
shall become payable by any other employer on and after the date
on which the employer becomes subject to this chapter.
(2) An employer shall be liable for taxes on all wages paid for
services performed on or after the first day of a calendar
quarter { + , except that an employer is not liable for taxes on
wages paid for services performed by an employee during any week
when the employee is under 18 years of age + }.
(3) Taxes of an employer shall not become payable until this
chapter has been approved by the Secretary of Labor, and notice
of such approval has been given to the Governor as provided in
section 3304 of the Federal Unemployment Tax Act.
(4) All taxes shall be paid to and collected by the Director of
the Employment Department at such times and in such manner as the
director may prescribe and upon collection, shall be deposited in
the Unemployment Compensation Trust Fund.
(5) In lieu of taxes required of all other employers subject to
this chapter, the state shall pay into the fund an amount
equivalent to the amount of all regular benefits and all extended
benefits paid out to claimants who during the applicable base
year were paid wages by the state. Payments required under this
section shall be payable from the General Fund of the state
except that if a claimant was paid wages by the state during the
base year from a special or administrative fund provided for by
law, the payment into the fund shall be made from such special or
administrative fund with the approval of the Oregon Department of
Administrative Services.
(6) Any political subdivision subject to this chapter shall in
lieu of taxes required of other employers subject to this
chapter, pay into the fund an amount equivalent to the amount of
all regular benefits and all extended benefits paid out to
claimants who during the applicable base year were paid wages by
the political subdivision.
(7)(a) Any nonprofit employing unit { + , + } as defined in ORS
657.072 (2), subject to or electing coverage under this chapter
shall pay taxes under the provisions of ORS 657.475 and 657.480.
However, such nonprofit employing unit may elect to make
reimbursement payments into the Unemployment Compensation Trust
Fund in an amount equivalent to the amount of regular benefits
and one-half of extended benefits paid out to claimants who
during the applicable base period were paid wages by such
nonprofit employing unit. Such reimbursement payments shall be
deemed to be taxes for all purposes of this chapter.
(b) A nonprofit employing unit may elect to make reimbursement
payments by filing with the Director of the Employment Department
a written notice to this effect within the 30-day period
following the close of the calendar quarter in which the
employing unit became an employer, or may make a timely election
within 30 days after the director finds the nonprofit employing
unit in default with respect to payment of taxes if the director
has not found the default to be due to an intent to postpone or
avoid either payment of taxes due the Unemployment Compensation
Trust Fund or the election to make reimbursement payments
pursuant to this paragraph. A nonprofit employing unit failing to
submit a timely notice of election of reimbursement shall be
liable for taxes on any wages paid for services performed for
such employing unit for two calendar years. Such employing unit
will remain liable for taxes for any calendar year thereafter
unless a written notice of election of reimbursement is filed
with the director by January 31 of such calendar year. The
director shall for good cause extend the period within which a
notice of election of reimbursement must be filed for an
additional 30 days.
(c) Elections of reimbursement shall continue until canceled
but shall be for a period of not less than two calendar years.
Any nonprofit employing unit may cancel such election, and pay
taxes as any other employer, by filing with the director a
written notice of its intention to cancel such election by
January 31 of the year in which the cancellation is to be
effective. The director may for good cause extend the period
within which a notice of cancellation may be filed for an
additional 30 days. Once a cancellation is effective the
nonprofit employing unit must pay taxes for two calendar years
before it is again eligible for election of reimbursement. An
employer whose election of reimbursement has been canceled shall
thereafter be liable for taxes at the rate assigned an employer
in accordance with ORS 657.435 until such employer is eligible
for a rate based on the experience of the employer in accordance
with the provisions of ORS 657.475 and 657.480.
(d) Each nonprofit employing unit that elects to reimburse the
fund shall, within 30 days after the effective date of its
election, either execute and file with the director a surety bond
or deposit with the director money, an irrevocable letter of
credit issued by an insured institution as defined in ORS 706.008
or other security as approved by the director. The amount of the
bond or deposit shall be determined as a percentage of the
employing unit's total wages paid for employment covered by this
chapter for the four calendar quarters immediately preceding the
effective date of the election. The following schedule shall
apply in determining the amount of bond or deposit:
_________________________________________________________________
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Four Quarter PayrollPercent
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Under $100,000 2.0
$100,000 $499,999 1.5
$500,000 $999,999 1.0
$1,000,000 and over 0.5
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
_________________________________________________________________
If the nonprofit employing unit did not pay wages in each of such
four calendar quarters, the amount of the bond or deposit shall
be as determined by the director. The amount of the bond or
deposit as determined by the schedule in this subsection shall
not exceed the amount of taxes the employing unit would have been
assessed at the maximum tax rate for the same period had not the
employing unit elected to make reimbursement payments. However,
no surety bond or deposit shall be required of an institution of
higher education, unless in the discretion of the director the
director determines that a surety bond or deposit shall be
required of such an institution.
(A) Any bond or letter of credit deposited under this paragraph
shall be in force for a period of not less than two calendar
years and shall be renewed with the approval of the director, at
such times as the director may prescribe, but not less frequently
than at two year intervals as long as the employing unit
continues to be liable for reimbursement payments. The director
shall require adjustments to be made in a previously filed bond
or letter of credit as the director deems appropriate. If the
bond or letter of credit is to be increased, the bond or letter
of credit shall be filed by the employing unit within 30 days of
the date notice of the required adjustment was mailed or
otherwise delivered to it. Failure by any employing unit covered
by such bond or letter of credit to pay the full amount of
reimbursements when due, together with any applicable interest
and penalties, shall render the surety liable on said bond or the
issuer liable on the letter of credit to the extent of the amount
thereof including interest and penalties assessed pursuant to
this chapter.
(B) Any deposit of money or security in accordance with this
paragraph shall be retained by the director. Money shall be
deposited in the Employment Tax Guarantee Fund. When liability
under the election is terminated the deposit shall be returned to
the employing unit, less any deductions as hereinafter provided.
The director may transfer moneys from the Employment Tax
Guarantee Fund or sell securities deposited as necessary to
satisfy any due and unpaid reimbursements and any applicable
interest and penalties. The director shall require the employing
unit within 30 days following transfer of a money deposit or sale
of securities to deposit sufficient additional money or
securities to restore the original deposit in full. The director
may, at any time, review the adequacy of the deposit made by any
employing unit. If, as a result of such review, the director
determines that an adjustment is necessary, the director shall
require the employing unit to make an additional deposit within
30 days of written notice of the determination or shall return to
it such portion of the deposit as the director no longer
considers necessary, whichever action is appropriate.
(C) If any nonprofit employing unit fails to file a bond or
make a deposit, or to file a bond in an increased amount or to
increase or make whole the amount of a previously made deposit,
as provided in this section, the director may terminate such
employing unit's election to make reimbursement payments. The
director may extend for good cause the applicable filing, deposit
or adjustment period by not more than 30 days. An employing unit
having its election terminated under this section shall pay taxes
for a period of two calendar years before it is again eligible
for election to reimburse.
(8)(a) At the end of each calendar quarter, or at the end of
any other period as prescribed by the director, the director
shall determine the amount of payments in lieu of taxes or
reimbursement payments required, under subsections (5), (6) and
(7) of this section, and shall bill each employer for such
amount. If a claimant during a base year was employed by an
employer liable for payments in lieu of taxes or reimbursement
payments and other employers subject to the tax rate provisions
of this chapter, the amount to be paid into the fund by employers
liable for payments in lieu of taxes or reimbursement payments
shall be an amount which is in the same proportion that the wages
paid by each employer to the individual during the base year bear
to the wages paid by all employers to that individual during that
year.
(b) In determining the amount of payments in lieu of taxes or
reimbursement payments, benefits paid for any reason shall be
included if such benefits or any portion thereof were paid as a
result of wages earned in the employ of an employer required to
make reimbursing payments or payments in lieu of taxes. Such
benefits paid include but are not limited to payments made as a
result of a determination or payments erroneously or incorrectly
paid or paid as a result of a determination of eligibility which
is subsequently reversed. Any benefit payments described in this
paragraph that are subsequently recovered by the Employment
Department will be credited on a pro rata basis to the account of
the employer that reimbursed the fund for such benefits.
(c) Payment of any bill rendered under paragraph (a) of this
subsection shall be made not later than the last day of the month
immediately following the month in which such bill was mailed to
the last-known address of the employer or was otherwise delivered
to it. The director may assess a nonprofit employing unit for
past due taxes and such assessment shall be subject to the same
interest, penalties, enforcement, appeal and any other provisions
of this chapter that apply to taxes assessed pursuant to ORS
657.681.
(d) If a nonprofit employing unit is delinquent in making
reimbursement payments as required under this section, the
director may terminate such employing unit's election and such
employing unit must pay taxes for two calendar years before it is
again eligible for election of reimbursement. Any employer whose
election is terminated under provisions of this section shall
remain liable for reimbursement payments for any benefits paid
based on wages received prior to the effective date of
termination of the election.
(9) Notwithstanding the provisions of subsections (5), (6), (7)
and (8) of this section, each employing unit that is required to
make payments in lieu of taxes or has elected to make
reimbursement payments may request permission to make advance or
budget payments in accordance with rules adopted by the director.
(10) Two or more employers that have become liable for payments
in lieu of taxes or reimbursement payments, in accordance with
the provisions of subsections (5), (6) and (7) of this section,
may file a joint application to the director for the
establishment of a group account for the purpose of sharing the
cost of benefits paid that are attributable to service in the
employ of such employers. Each application shall identify and
authorize a group representative to act as the group's agent for
the purpose of this subsection. Upon the approval of the director
of the application, the director shall establish a group account
for such employers effective as of the beginning of the calendar
quarter in which the director receives the application and shall
notify the group's agent of the effective date of the account.
Such account shall remain in effect for not less than two years
and thereafter until terminated at the discretion of the director
or upon application by the group. Upon establishment of the
account, each member of the group shall be liable for payments
with respect to each calendar quarter in the amount that bears
the same ratio to the total benefits paid in such quarter that
are attributable to service performed in the employ of all
members of the group. The director shall prescribe such
regulations as the director deems necessary with respect to
application for establishment, maintenance and termination of
group accounts. This subsection shall not be construed to make
such agent the employer of such workers, or relieve any employer
of the obligations of the employer to comply with the terms of
this chapter, except to the extent that such obligations are
discharged by such agent as provided thereunder.
SECTION 2. { + The amendments to ORS 657.505 by section 1 of
this 2001 Act apply only to services performed on or after the
effective date of this 2001 Act. + }
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