Connecticut General Statutes 31-223b – Transfer of unemployment experience upon transfer of assets, organization, trade or business of employer. Penalties
(a) For purposes of this section:
Terms Used In Connecticut General Statutes 31-223b
- Administrator: means the Labor Commissioner. See Connecticut General Statutes 31-222
- another: may extend and be applied to communities, companies, corporations, public or private, limited liability companies, societies and associations. See Connecticut General Statutes 1-1
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- employment: shall include services described in clause (I) and (II) above performed after December 31, 1971, if 1. See Connecticut General Statutes 31-222
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Public law: A public bill or joint resolution that has passed both chambers and been enacted into law. Public laws have general applicability nationwide.
- Taxable wages: means total wages except:
(A) That part of the remuneration (i) in excess of seven thousand one hundred dollars paid by an employer to an individual during any calendar year commencing on or after January 1, 1983, and prior to January 1, 1994, (ii) in excess of nine thousand dollars paid by an employer to an individual during the calendar year commencing on January 1, 1994, (iii) in excess of an amount equal to the taxable wages for the prior year increased by one thousand dollars so paid during any calendar year commencing on or after January 1, 1995, but prior to January 1, 1999, (iv) in excess of fifteen thousand dollars for any calendar year commencing on or after January 1, 1999, but prior to January 1, 2024, (v) in excess of twenty-five thousand dollars for the calendar year commencing on January 1, 2024, or (vi) for each calendar year commencing on or after January 1, 2025, in excess of an amount equal to the taxable wages for the prior year (I) adjusted by the percentage change in the employment cost index or its successor index, for wages and salaries for all civilian workers, as calculated by the United States Department of Labor, over the twelve-month period ending on June thirtieth of the preceding year, and (II) rounded to the nearest multiple of one hundred dollars. See Connecticut General Statutes 31-222
(1) “Knowingly” means having actual knowledge of or acting with deliberate ignorance of or reckless disregard for a prohibition or requirement under this section;
(2) “Person” means an individual, corporation, limited liability company, company, trust, estate, partnership or association;
(3) “Trade or business” includes an employer’s employees; and
(4) “Violates or attempts to violate” includes, but is not limited to, the evasion of or attempt to evade any provision of this section, or any misrepresentation or wilful nondisclosure of information required to be given under this section.
(b) No person who acquires the assets, organization, trade or business of an employer solely or primarily for the purpose of obtaining a lower contribution rate to the Unemployment Compensation Fund shall acquire the unemployment experience of such employer, and such acquisition shall be deemed a violation under this subsection. If the administrator determines that a person has acquired such assets solely or primarily for the purpose of obtaining a lower contribution rate, the administrator shall require such person to pay contributions at the rate provided in subsection (d) of § 31-225a for an employer who has not been chargeable with benefits for a sufficient period of time to have such employer’s rate otherwise computed under § 31-225a or, where applicable, the person’s charged tax rate, as provided in subsection (e) of § 31-225a, whichever is greater. In determining whether the assets, organization, trade or business of an employer was acquired solely or primarily for the purpose of obtaining a lower contribution rate, the factors the administrator shall consider shall include, but not be limited to, the cost of acquiring the business, whether the person continued the business activity of the acquired business, how long the business was continued and whether a substantial number of new employees were hired for performance of duties unrelated to the business activity conducted by the business prior to its acquisition.
(c) Notwithstanding any other provision of this chapter relating to the transfer of unemployment experience, if an employer transfers its assets, organization, trade or business, or a portion of its assets, organization, trade or business, to another employer with whom, at the time of such transfer, the transferring employer shares substantially common ownership, management or control, the unemployment experience of the transferring employer shall be transferred to the receiving employer. The administrator shall recalculate the contribution rates of both employers and make such recalculated rates effective upon the date of the transfer. The administrator may require from any employer, whether or not otherwise subject to this chapter, any sworn or unsworn reports that are necessary for the effective administration of this section.
(d) In addition to the penalty imposed pursuant to subsection (e) of this section and any applicable penalties under this chapter, if a person knowingly violates or attempts to violate any provision of subsection (b) or (c) of this section, or any other provision of this chapter relating to determining the assignment of a contribution rate, or knowingly advises another person in the violation of subsection (b) or (c) of this section, such person shall be subject to the following penalties:
(1) If the person is an employer, such person shall be assigned a penalty rate of contributions of two per cent of taxable wages for the year during which such violation or attempted violation occurred and for the following three years.
(2) If the person is not an employer, such person shall be subject to a civil penalty of not less than five hundred dollars or more than five thousand dollars. Any such penalty shall be deposited into the Employment Security Special Administration Fund established under subsection (d) of § 31-259.
(e) Any person who violates this section shall be fined not more than two thousand dollars or imprisoned not more than one year, or both.
(f) The administrator shall adopt regulations, in accordance with the provisions of chapter 54, to establish procedures and guidelines necessary to implement the provisions of this section, including procedures to identify the transfer or acquisition of a business for purposes of this section.
(g) This section shall be interpreted and applied in such a manner as to meet the minimum requirements of Public Law 108-295 as interpreted by the federal Department of Labor.
(h) This section shall apply to unemployment compensation tax years beginning on and after January 1, 2006.