Introduced Version






SENATE BILL No. 506

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DIGEST OF INTRODUCED BILL



Citations Affected: IC 22-4; IC 27-16-10.

Synopsis: Unemployment insurance. Provides that, after December 31, 2013, a professional employer organization (PEO) shall report and pay all required contributions to the unemployment compensation fund using each client's state employer account number and the contribution rate determined using only that client's experience. Provides that a client without an experience record sufficient to determine a contribution rate is treated as a new employer. Makes a technical correction concerning successor employer contribution rates. Repeals in Title 27 and establishes in Title 22 language concerning the determination and payment of employer contribution rates by a PEO. Voids obsolete department of workforce development rules concerning PEOs.

Effective: July 1, 2013; January 1, 2014.





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    January 14, 2013, read first time and referred to Committee on Pensions and Labor.







Introduced

First Regular Session 118th General Assembly (2013)


PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
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SENATE BILL No. 506



    A BILL FOR AN ACT to amend the Indiana Code concerning labor and safety.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 22-4-6.5; (13)IN0506.1.1. -->     SECTION 1. IC 22-4-6.5 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2013]:
     Chapter 6.5. Professional Employer Organizations
    Sec. 1. This chapter applies to a professional employer organization doing business in Indiana after December 31, 2013.
    Sec. 2. As used in this chapter, "client" has the meaning set forth in IC 27-16-2-3.
    Sec. 3. As used in this chapter, "covered employee" has the meaning set forth in IC 27-16-2-8.
    Sec. 4. As used in this chapter, "professional employer agreement" has the meaning set forth in IC 27-16-2-12.
    Sec. 5. As used in this chapter, "professional employer organization" or "PEO" has the meaning set forth in IC 27-16-2-13.
    Sec. 6. (a) For purposes of this article, a covered employee of a PEO is an employee of the client.
    (b) A PEO is responsible for the payment of contributions, penalties, and interest assessed under this article on wages paid by the PEO to the PEO's covered employees during the term of the professional employer agreement.
    Sec. 7. A PEO shall report and pay all required contributions to the unemployment compensation fund as required by IC 22-4-10 using each client's state employer account number and the contribution rate determined using only that client's experience. The department of workforce development shall treat a client without an experience record sufficient to determine a contribution rate as a new employer under IC 22-4-11-2(b)(2).

SOURCE: IC 22-4-9-3; (13)IN0506.1.2. -->     SECTION 2. IC 22-4-9-3, AS AMENDED BY P.L.108-2006, SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2013] : Sec. 3. (a) This section is subject to the provisions of IC 22-4-6.5 and IC 22-4-11.5.
    (b) Any employer subject to this article as successor to an employer pursuant to the provisions of IC 22-4-7-2(a) or IC 22-4-7-2(b) shall cease to be an employer at the end of the year in which the acquisition occurs only if the department finds that within such calendar year the employment experience of the predecessor prior to the date of disposition combined with the employment experience of the successor subsequent to the date of acquisition would not be sufficient to qualify the successor employer as an employer under the provisions of IC 22-4-7-1. No such successor employer may cease to be an employer subject to this article at the end of the first year of the current period of coverage of the predecessor employer. If all of the resources and liabilities of the experience account of an employer are assumed by another in accordance with the provisions of IC 22-4-10-6 or IC 22-4-10-7, such employer's status as employer and under this article is hereby terminated unless and until such employer subsequently qualifies under the provisions of IC 22-4-7-1 or IC 22-4-7-2 or elects to become an employer under sections 4 or 5 of this chapter.
    (c) If no application for termination, as herein provided, is filed by an employer and four (4) full calendar years have elapsed since any contributions have become payable from such employer, then and in such cases the department may terminate such employer's experience account.
SOURCE: IC 22-4-10-6; (13)IN0506.1.3. -->     SECTION 3. IC 22-4-10-6, AS AMENDED BY P.L.108-2006, SECTION 13, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 6. (a) Except as provided by IC 22-4-6.5, when:
        (1) an employing unit (whether or not an employing unit at the time of the acquisition) becomes an employer under

IC 22-4-7-2(a);
        (2) an employer acquires the organization, trade, or business, or substantially all the assets of another employer; or
        (3) an employer transfers all or a portion of the employer's trade or business (including the employer's workforce) to another employer as described in IC 22-4-11.5-7;
the successor employer shall, in accordance with the rules prescribed by the department, assume the position of the predecessor with respect to all the resources and liabilities of the predecessor's experience account.
    (b) Except as provided by IC 22-4-6.5 or IC 22-4-11.5, when:
        (1) an employing unit (whether or not an employing unit at the time of the acquisition) becomes an employer under IC 22-4-7-2(b); or
        (2) an employer acquires a distinct and segregable portion of the organization, trade, or business within this state of another employer;
the successor employer shall assume the position of the predecessor employer with respect to the portion of the resources and liabilities of the predecessor's experience account as pertains to the distinct and segregable portion of the predecessor's organization, trade, or business acquired by the successor. An application for the acquiring employer to assume this portion of the resources and liabilities of the disposing employer's experience account must be filed with the department on prescribed forms not later than thirty (30) days immediately following the disposition date or not later than ten (10) days after the disposing and acquiring employers are mailed or otherwise delivered final notice that the acquiring employer is a successor employer, whichever is the earlier date. This portion of the resources and liabilities of the disposing employer's experience account shall be transferred in accordance with IC 22-4-11.5.
    (c) Except as provided by IC 22-4-6.5 or IC 22-4-11.5, the successor employer, if an employer prior to the acquisition, shall pay at the rate of contribution originally assigned to it for the calendar year in which the acquisition occurs, until the end of that year. If not an employer prior to the acquisition, the successor employer shall pay the rate of two and seven-tenths percent (2.7%) determined under IC 22-4-11-2(b)(2), unless the successor employer assumes all or part of the resources and liabilities of the predecessor employer's experience account, in which event the successor employer shall pay at the rate of contribution assigned to the predecessor employer for the period starting with the first day of the calendar quarter in which the

acquisition occurs, until the end of that year. However, if a successor employer, not an employer prior to the acquisition, simultaneously acquires all or part of the experience balance of two (2) or more employers, the successor employer shall pay at the highest rate applicable to the experience accounts totally or partially acquired for the period starting with the first day of the calendar quarter in which the acquisition occurs, until the end of the year. If the successor employer had any employment prior to the date of acquisition upon which contributions were owed under IC 22-4-9-1, the employer's rate of contribution from the first of the year to the first day of the calendar quarter in which the acquisition occurred would be two and seven-tenths percent (2.7%). determined under IC 22-4-11-2(b)(2).

SOURCE: IC 22-4-10-7; (13)IN0506.1.4. -->     SECTION 4. IC 22-4-10-7, AS AMENDED BY P.L.98-2005, SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 7. (a) Except as provided by IC 22-4-6.5 or IC 22-4-11.5, when an employing unit (whether or not an employing unit prior thereto) assumes all of the resources and liabilities of the experience account of a predecessor employer, as provided in section 6 of this chapter, amounts paid by such predecessor employer shall be deemed to have been so paid by such successor employer. The experience of such predecessor with respect to unemployment risk, including but not limited to past payrolls and contributions, shall be credited to the account of such successor.
    (b) The payments of benefits to an individual shall not in any case be denied or withheld because the experience account of an employer does not reflect a balance and total of contributions paid to be in excess of benefits charged to such experience account.
SOURCE: IC 27-16-10; (13)IN0506.1.5. -->     SECTION 5. IC 27-16-10 IS REPEALED [EFFECTIVE JANUARY 1, 2014]. (Unemployment Compensation Insurance).
SOURCE: ; (13)IN0506.1.6. -->     SECTION 6. [EFFECTIVE JULY 1, 2013] (a) After December 31, 2013, 646 IAC 5-1-14 and 646 IAC 5-4 are void. The publisher of the Indiana Administrative Code and the Indiana Register shall remove 646 IAC 5-1-14 and 646 IAC 5-4 from the Indiana Administrative Code.
    (b) This SECTION expires July 1, 2014.