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Current Status Bill Number:View additional legislative information at the LPITS web site.3118 Ratification Number:78 Act Number:37 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19990112 Primary Sponsor:Haskins All Sponsors:Haskins, Edge, Robinson, Harrison, Simrill, Sandifer, Vaughn Drafted Document Number:l:\council\bills\nbd\11021jm99.doc Date Bill Passed both Bodies:19990518 Date of Last Amendment:19990427 Governor's Action:S Date of Governor's Action:19990601 Subject:Employer's base rate defined for employment security purposes, Labor, Employment Security Commission History Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ ------ 19990618 Act No. A37 ------ 19990601 Signed by Governor ------ 19990526 Ratified R78 Senate 19990518 Read third time, enrolled for ratification Senate 19990513 Read second time, notice of general amendments Senate 19990512 Recalled from Committee, 12 SLCI placed on the Calendar Senate 19990504 Introduced, read first time, 12 SLCI referred to Committee House 19990429 Read third time, sent to Senate House 19990428 Read second time House 19990427 Amended House 19990422 Committee report: Favorable with 30 HWM amendment House 19990112 Introduced, read first time, 30 HWM referred to Committee House 19981216 Prefiled, referred to Committee 30 HWM Versions of This Bill Revised on April 22, 1999 - Word format Revised on April 27, 1999 - Word format Revised on April 28, 1999 - Word format Revised on May 12, 1999 - Word format
(A37, R78, H3118)
AN ACT TO AMEND SECTION 41-27-410, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE EMPLOYMENT SECURITY ADMINISTRATIVE CONTINGENCY ASSESSMENT, SO AS TO PROVIDE THAT THE CONTRIBUTION RATE MEANS THE CONTRIBUTION BASE RATE; TO AMEND SECTION 41-31-10, RELATING TO THE GENERAL RATE OF CONTRIBUTION FOR EMPLOYMENT SECURITY PURPOSES, SO AS TO PROVIDE THAT, FOR CALENDAR YEAR 2000 AND THEREAFTER, EMPLOYERS SUBJECT TO THE PAYMENT OF CONTRIBUTIONS ARE SUBJECT ALSO TO AN ADJUSTMENT OVER AND ABOVE THEIR BASE RATE IF SO REQUIRED BY SECTION 41-31-80; TO AMEND SECTION 41-31-40, RELATING TO RATE COMPUTATION PERIODS AND THE MINIMUM CONTRIBUTION FOR THE FIRST TWENTY-FOUR MONTHS FOR EMPLOYMENT SECURITY PURPOSES, SO AS TO PROVIDE THAT RATE MEANS BASE RATE; TO AMEND SECTION 41-31-50, RELATING TO THE DETERMINATION OF RATES AND VOLUNTARY PAYMENTS FOR EMPLOYMENT SECURITY PURPOSES, SO AS TO PROVIDE THAT RATE MEANS BASE RATE, PROVIDE FOR THE SCHEDULE OF DETERMINED RATES FOR CALENDAR YEARS COMMENCING WITH THE YEAR 2000, AND PROVIDE FOR RELATED MATTERS; TO AMEND SECTION 41-31-60, RELATING TO EMPLOYMENT SECURITY, THE APPLICABLE RATE WHERE A DELINQUENT REPORT IS RECEIVED, AND THE PROVISION THAT THERE SHALL BE NO REDUCTION PERMITTED IN THE RATE WHEN EXECUTION FOR THE UNPAID TAX IS OUTSTANDING, SO AS TO PROVIDE THAT RATE MEANS BASE RATE; TO AMEND SECTION 41-31-80, RELATING TO EMPLOYMENT SECURITY AND THE STATEWIDE RESERVE RATIO, SO AS TO PROVIDE THAT FOR THE BASE RATE COMPUTATIONS MADE FOR YEARS PRIOR TO CALENDAR YEAR 2000, WHEN THE STATEWIDE RESERVE RATIO COMPUTED DURING ANY CALENDAR YEAR EQUALS OR EXCEEDS THREE AND ONE-HALF PERCENT, CONTRIBUTION RATES APPLICABLE TO THE ENSUING CALENDAR YEAR ARE COMPUTED IN ACCORDANCE WITH SECTIONS 41-31-40 AND 41-31-50, AND PROVIDE THAT FOR THE BASE RATE COMPUTATIONS MADE FOR YEARS COMMENCING WITH CALENDAR YEAR 2000, WHEN THE STATEWIDE RESERVE RATIO COMPUTED DURING ANY CALENDAR YEAR IS LESS THAN TWO PERCENT, ALL CONTRIBUTION BASE RATES AS COMPUTED IN ACCORDANCE WITH SECTIONS 41-31-40 AND 41-31-50 ARE ADJUSTED IN ACCORDANCE WITH THE PROVIDED SCHEDULE; TO AMEND SECTION 41-31-110, RELATING TO EMPLOYMENT SECURITY AND THE COMPUTATION OF RATES APPLICABLE TO SUCCESSORS, SO AS TO PROVIDE THAT RATE MEANS BASE RATE; AND TO AMEND SECTION 41-31-670, RELATING TO EMPLOYMENT SECURITY, FINANCING BENEFITS PAID TO EMPLOYEES OF NONPROFIT ORGANIZATIONS, AND SPECIAL PROVISIONS FOR ORGANIZATIONS THAT MADE REGULAR CONTRIBUTIONS PRIOR TO JANUARY 1, 1969, SO AS TO PROVIDE THAT EMPLOYER'S RATE MEANS EMPLOYER'S BASE RATE.
Be it enacted by the General Assembly of the State of South Carolina:
Contribution base rate
SECTION 1. Section 41-27-410 of the 1976 Code is amended to read:
"Section 41-27-410. Effective January 1, 1986, the employment security administrative contingency assessment is an assessment of six one-hundredths of one percent to be assessed upon the wages as defined in Section 41-27-380(2) of all employers except those who have either elected to make payments in lieu of contributions as defined in Section 41-31-620 or are liable for the payment of contributions as defined in Section 41-31-620 or are liable for the payment of contributions and are classified as a state agency or any political subdivision or any instrumentality of the political subdivision as defined in Section 41-27-230(2) or have been assigned a contribution base rate of five and four-tenths percent."
Adjustment over and above base rate
SECTION 2. Section 41-31-10 of the 1976 Code is amended to read:
"Section 41-31-10. (A) Each employer shall pay contributions equal to five and four-tenths percent of wages paid by him during each year except as may be otherwise provided in Chapters 27 through 41 of this title.
(B) For calendar year 2000 and subsequent years, employers subject to the payment of contributions are subject also to an adjustment over and above their base rate, if required by Section 41-31-80(2)."
Base rate
SECTION 3. Section 41-31-40 of the 1976 Code is amended to read:
"Section 41-31-40. Each employer's base rate for the twelve months commencing January first of any calendar year is determined in accordance with Section 41-31-50 on the basis of his record up to July first of the preceding calendar year, but no employer's base rate is less than two and sixty-four hundredths percent until there have been twenty-four consecutive months of coverage after first becoming liable for contributions under Chapters 27 through 41 of this title. Each employer who completes twenty-four consecutive calendar months of coverage after first becoming liable for contributions under the chapters during the current calendar year shall have a base rate computed at the beginning of the calendar quarter following the calendar quarter during which twenty-four consecutive months of coverage are completed based on the employer's experience through the preceding quarter. The base rate computed in accordance with Section 41-31-50 is applicable for the remainder of the current calendar year. For those employers completing the twenty-four months of coverage during the current calendar year, a new base rate for the succeeding calendar year is determined on the basis of their records through December thirty-first of the current year."
Base rate; schedule, etc.
SECTION 4. Section 41-31-50 of the 1976 Code is amended to read:
"Section 41-31-50. Each employer eligible for a rate computation shall have his base rate determined in the following manner:
(1) If, on the computation date as of which an employer's base rate is to be computed, as provided in Section 41-31-40, the total of all his contributions paid on his own behalf for all past periods exceeds the total benefits charged to his account for all the periods his contribution base rate for the period specified in Section 41-31-40 is, except for the provisions of Section 41-31-80, as follows:
(a) With respect to the calendar year 1973:
(i) two and thirty-five hundredths percent, if the excess equals or exceeds five percent but is less than six percent of his most recent annual payroll;
(ii) two percent, if the excess equals or exceeds six percent but is less than seven percent of his most recent annual payroll;
(iii) one and sixty-five hundredths percent, if the excess equals or exceeds seven percent but is less than eight percent of his most recent annual payroll;
(iv) one and thirty hundredths percent, if the excess equals or exceeds eight percent but is less than nine percent of his most recent annual payroll;
(v) ninety-five hundredths of one percent, if the excess equals or exceeds nine percent but is less than ten percent of his most recent annual payroll;
(vi) six-tenths of one percent, if the excess equals or exceeds ten percent but is less than eleven percent of his most recent annual payroll;
(vii) twenty-five hundredths of one percent, if the excess equals or exceeds eleven percent of his most recent annual payroll.
(b) With respect to calendar years 1974 through 1985:
(i) two and thirty-five hundredths percent, if the excess equals or exceeds three percent but is less than four percent of his most recent annual payroll;
(ii) two percent, if the excess equals or exceeds four percent but is less than five percent of his most recent annual payroll;
(iii) one and sixty-five hundredths percent, if the excess equals or exceeds five percent but is less than six percent of his most recent annual payroll;
(iv) one and thirty hundredths percent, if the excess equals or exceeds six percent but is less than seven percent of his most recent annual payroll;
(v) ninety-five hundredths of one percent, if the excess equals or exceeds seven percent but is less than eight percent of his most recent annual payroll;
(vi) six-tenths of one percent, if the excess equals or exceeds eight percent but is less than nine percent of his most recent annual payroll;
(vii) twenty-five hundredths of one percent, if the excess equals or exceeds nine percent of his most recent annual payroll.
(c) With respect to any calendar year commencing with the calendar year 1986:
(i) two and twenty-nine hundredths percent, if the excess equals or exceeds three percent but is less than four percent of his most recent annual payroll;
(ii) one and ninety-four hundredths percent, if the excess equals or exceeds four percent but is less than five percent of his most recent annual payroll;
(iii) one and fifty-nine hundredths percent, if the excess equals or exceeds five percent but is less than six percent of his most recent annual payroll;
(iv) one and twenty-four hundredths percent, if the excess equals or exceeds six percent but is less than seven percent of his most recent annual payroll;
(v) eighty-nine hundredths of one percent, if the excess equals or exceeds seven percent but is less than eight percent of his most recent annual payroll;
(vi) fifty-four hundredths of one percent if the excess equals or exceeds eight percent but is less than nine percent of his most recent annual payroll;
(vii) nineteen hundredths of one percent, if the excess equals or exceeds nine percent of his most recent annual payroll.
(d) With respect to any calendar year commencing with the calendar year 2000:
(i) two and sixty-four hundredths percent, if the excess is less than four percent of his most recent annual payroll;
(ii) two and twenty-nine hundredths percent, if the excess equals or exceeds four percent but is less than five percent of his most recent annual payroll;
(iii) one and ninety-four hundredths percent, if the excess equals or exceeds five percent but is less than six percent of his most recent annual payroll;
(iv) one and fifty-nine hundredths percent, if the excess equals or exceeds six percent but is less than seven percent of his most recent annual payroll;
(v) one and twenty-four hundredths percent, if the excess equals or exceeds seven percent but is less than eight percent of his most recent annual payroll;
(vi) eighty-nine hundredths percent, if the excess equals or exceeds eight percent but is less than nine percent of his most recent annual payroll;
(vii) fifty-four hundredths percent, if the excess equals or exceeds nine percent of his most recent annual payroll.
(2) If, on the computation date as of which an employer's base rate is to be computed, as provided in Section 41-31-40, the total of all his contributions paid on his own behalf for all past periods is less than the total benefits charged to his account for all the periods his contribution base rate for the period specified in Section 41-31-40 is, except for the provisions of Section 41-31-80, as follows:
(a) With respect to any calendar year prior to the calendar year 1985:
(i) three and five hundredths percent, if the deficit equals five percent but is less than ten percent of his most recent annual payroll;
(ii) three and forty hundredths percent, if the deficit equals ten percent but is less than fifteen percent of his most recent annual payroll;
(iii) three and seventy-five hundredths percent, if the deficit equals fifteen percent but is less than twenty percent of his most recent annual payroll;
(iv) four and ten hundredths percent, if the deficit equals or exceeds twenty percent of his most recent annual payroll.
(b) With respect to the calendar year 1985:
(i) three and five hundredths percent, if the deficit equals five percent but is less than ten percent of his most recent annual payroll;
(ii) three and forty hundredths percent, if the deficit equals ten percent but is less than fifteen percent of his most recent annual payroll;
(iii) three and seventy-five hundredths percent, if the deficit equals fifteen percent but is less than twenty percent of his most recent annual payroll;
(iv) four and ten hundredths percent, if the deficit equals twenty percent but is less than twenty-five percent of his most recent annual payroll;
(v) four and forty-five hundredths percent, if the deficit equals twenty-five percent but is less than thirty percent of his most recent annual payroll;
(vi) four and eighty hundredths percent, if the deficit equals thirty percent but is less than thirty-five percent of his most recent annual payroll;
(vii) five and fifteen hundredths percent, if the deficit equals thirty-five percent but is less than forty percent of his most recent annual payroll;
(viii) five and forty hundredths percent, if the deficit equals or exceeds forty percent of his most recent annual payroll.
(c) With respect to any calendar year commencing with the calendar year 1986:
(i) two and sixty-four hundredths percent, if the deficit is less than five percent of his most recent annual payroll;
(ii) two and ninety-nine hundredths percent if the deficit equals or exceeds five percent but is less than ten percent of his most recent annual payroll;
(iii) three and thirty-four hundredths percent if the deficit equals or exceeds ten percent but is less than fifteen percent of his most recent annual payroll;
(iv) three and sixty-nine hundredths percent if the deficit equals or exceeds fifteen percent but is less than twenty percent of his most recent annual payroll;
(v) four and four hundredths percent if the deficit equals or exceeds twenty percent but is less than twenty-five percent of his most recent annual payroll;
(vi) four and thirty-nine hundredths percent if the deficit equals or exceeds twenty-five percent but is less than thirty percent of his most recent annual payroll;
(vii) four and seventy-four hundredths percent if the deficit equals or exceeds thirty percent but is less than thirty-five percent of his most recent annual payroll;
(viii) five and nine hundredths percent if the deficit equals or exceeds thirty-five percent but is less than forty percent of his most recent annual payroll;
(ix) five and forty hundredths percent if the deficit equals or exceeds forty percent of his most recent annual payroll.
(3) In determining an employer's contribution rate, contributions for the quarter immediately preceding the computation date are considered as paid before the computation date if they are paid by the employer on or before the end of the month following the quarter or within any period of grace allowed by the commission for payment of the quarter's contribution.
(4) For calendar year 1986 and any subsequent calendar year, voluntary payments are not permitted for the purpose of obtaining a lower rate of required contributions."
Base rate
SECTION 5. Section 41-31-60 of the 1976 Code is amended to read:
"Section 41-31-60. (1) If on the computation date upon which an employer's base rate is to be computed as provided in Section 41-31-40 there is a delinquent report, a base rate of five and four-tenths percent must be assigned until the next computation date. The assigned base rate is applicable for the entire period for which the computation is made even though the delinquent report is subsequently received.
(2) No employer is permitted to pay his unemployment compensation tax at a reduced base rate for any quarter when a tax execution issued in accordance with Section 41-31-390 with respect to delinquent unemployment compensation tax for a previous quarter is unpaid and outstanding against the employer. If on the computation date upon which an employer's base rate is computed as provided in Section 41-31-40 there is an outstanding tax execution, a base rate of two and sixty-four hundredths percent must be assigned for the period to which the computation applies. If the base rate for the prior year or the computed base rate for the computation period is greater than two and sixty-four hundredths percent, the highest base rate must be assigned until the next computation date or until such time as any outstanding tax execution has been paid."
Computation of contribution rates; adjustment of contribution base rates
SECTION 6. Section 41-31-80 of the 1976 Code is amended to read:
"Section 41-31-80. A statewide reserve ratio must be computed once each year by adding to the total unemployment compensation fund on June thirtieth all contributions and interest received on or before July thirty-first and dividing the result so obtained by the sum of the total wages reported by contributing employers on their contribution reports received by the commission during the twelve-month period ending September thirtieth of the current year. Any amount credited to the state's account under Section 903 of the Social Security Act, as amended, which has been appropriated for expenses of administration, whether or not withdrawn from the trust fund, is excluded from the unemployment fund balance in computing the statewide reserve ratio. Any amount due and payable as a payment in lieu of contributions by a nonprofit organization as provided in Section 41-31-630, the State of South Carolina, or the federal government must be added to the total unemployment compensation fund for the purposes of the computations required by this section.
(1) For the base rate computations made for years prior to the calendar year 2000, when the statewide reserve ratio computed during any calendar year equals or exceeds three and one-half percent, contribution rates applicable to the following calendar year are computed in accordance with Sections 41-31-40 and 41-31-50. When the statewide reserve ratio computed during any calendar year is less than three and one-half percent, all contribution rates applicable to the following calendar year are increased over those computed in accordance with Sections 41-31-40 and 41-31-50 as follows:
(a) thirty-five hundredths of one percent, if the statewide reserve ratio equals or exceeds three percent but is less than three and one-half percent;
(b) seven-tenths of one percent, if the statewide reserve ratio equals or exceeds two and one-half percent but is less than three percent; and
(c) one and five hundredths percent, if the statewide reserve ratio is less than two and one-half percent.
This section does not apply to any employer whose contribution rate is more than two and sixty-four hundredths percent, and no employer's rate shall exceed two and sixty-four hundredths percent by reason of the application of this section.
(2) For the base rate computations made for years commencing with calendar year 2000, when the statewide reserve ratio computed during any calendar year is less than two percent, all contribution base rates as computed in accordance with Sections 41-31-40 and 41-31-50 are adjusted as follows:
(a) one-tenth percent, if the statewide reserve ratio is less than two percent but not less than one and nine-tenths percent;
(b) two-tenths percent, if the statewide reserve ratio is less than one and nine-tenths percent but not less than one and eight-tenths percent;
(c) three-tenths percent, if the statewide reserve ratio is less than one and eight-tenths percent but not less than one and seven-tenths percent;
(d) four-tenths percent, if the statewide reserve ratio is less than one and seven-tenths percent but not less than one and six-tenths percent;
(e) five-tenths percent, if the statewide reserve ratio is less than one and six-tenths percent but not less than one and five-tenths percent;
(f) six-tenths percent, if the statewide reserve ratio is less than one and five-tenths percent but not less than one and four-tenths percent;
(g) seven-tenths percent, if the statewide reserve ratio is less than one and four-tenths percent."
Base rate
SECTION 7. Section 41-31-110 of the 1976 Code is amended to read:
"Section 41-31-110. Whenever any person or other legal entity has in any manner succeeded to or has acquired substantially all or a distinct and severable portion of the business of another, as provided in Sections 41-31-100 and 41-31-120, the base rates of contributions are computed as follows:
(a) If the successor is not already an employer at the time of the acquisition, the base rate of contributions applicable to the predecessor employer with respect to the period immediately preceding the date of acquisition, if there is only one predecessor employer, shall apply to the successor employer for the remainder of the calendar year. The base rate for the subsequent calendar year is computed based upon the employment benefit experience record of the predecessor or upon the combined employment benefit experience record of the predecessor and the successor, if applicable, as of June thirtieth of the year in which the acquisition occurred.
(b) If the successor is not already an employer at the time of the acquisition and there is more than one transferring employer with a different base rate, the successor employer is assigned the base rate of that transferring employer who has the highest base rate with the base rate being applicable until the end of the quarter in which the succession occurs.
(c) If the successor is already an employer at the time of the acquisition, the base rate of contributions applicable at the time of the acquisition to the successor employer shall continue to be applicable until the end of the quarter in which succession occurs.
For the purposes of items (b) and (c), the base rate as assigned continues in effect until the first day of the next calendar quarter immediately following the acquisition, at which time the commission shall compute a base rate based upon the combination of that portion of the employment benefit experience record acquired from the predecessor with the employment benefit experience record of the successor, subject to the provisions of this article, which base rate is applicable to the successor from the first day of the quarter for the remainder of the calendar year. If the acquisition occurred prior to July first, the base rate for the subsequent calendar year is computed based upon the combined employment benefit experience record as of June thirtieth of the year in which the acquisition occurred; if the acquisition occurred subsequent to June thirtieth, the base rate for the subsequent calendar year is computed based upon the combined employment benefit experience record as of December thirty-first. All base rates thereafter are computed upon the basis of the combined employment benefit experience record and at such time as provided in Section 41-31-40."
Employer's base rate
SECTION 8. Section 41-31-670(2) of the 1976 Code is amended to read:
"(2) Any nonprofit organization which has elected to become liable for payments in lieu of contributions under the provisions of Sections 41-31-620 and 41-31-630 and thereafter terminates the election shall become an employer liable for the payments of contributions upon the effective date of the termination but no such employer's base rate thereafter may be less than two and sixty-four hundredths percent until there have been twenty-four consecutive calendar months of coverage after so becoming liable for the payment of contributions. If the employer has been an employer liable for the payment of contributions prior to election to become liable for payments in lieu of contributions, the balance in the experience rating account of the employer as of the termination date of the election to become liable for payments in lieu of contributions is transferred to the new experience rating account then established for the employer."
Time effective
SECTION 9. This act takes effect upon approval by the Governor.
Ratified the 26th day of May, 1999.
Approved the 1st day of June, 1999.
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