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341.277 Financing benefits for employees of governmental entities.
(1)
(2)
Any governmental entity which, pursuant to KRS 341.070(3), is or becomes a
subject employer shall pay contributions under the provisions of KRS 341.270,
unless it elects, in accordance with this section, to pay the cabinet for the fund an
amount equal to the amount of all regular benefits plus all extended benefits paid to
workers for compensable weeks of unemployment occurring on or after January 1,
1979, and for all regular benefits and one-half (1/2) of extended benefits paid to
workers for compensable weeks of unemployment occurring prior to such date that
is attributable to service performed in covered employment in the employ of such
governmental entity during the effective period of such election but only if the
employer is the worker's most recent employer. No employer shall be deemed to be
the most recent employer unless the eligible worker to whom benefits are payable
shall have worked for that employer in each of ten (10) weeks whether or not
consecutive.
(a) Any governmental entity, which is or becomes a subject employer, may elect
to become liable for payment in lieu of contributions for a period of not less
than the calendar year in which such subjectivity begins and for the following
calendar year provided it files with the cabinet a written notice of its election
within thirty (30) days immediately following the date of the determinations
of such subjectivity; or
(b) Any governmental entity which has paid contributions under the provisions of
KRS 341.270 may change to a reimbursable basis by filing with the cabinet a
written notice of its election not later than thirty (30) days prior to the
beginning of any calendar year to make payments in lieu of contributions for a
period of not less than two (2) calendar years following the effective date of
such election.
(c) Any governmental entity which elects to make payments in lieu of
contributions, in accordance with paragraph (a) or (b) of this subsection, shall
continue to be liable for payments in lieu of contributions until it files with the
secretary a written notice terminating its election not later than thirty (30) days
prior to the beginning of the calendar year for which such termination shall
become effective except that liability for payments in lieu of contributions
shall continue thereafter with respect to wages paid prior to the effective date
of such termination.
(d) The secretary may for good cause extend the period within which a notice of
election must be filed and may permit the effective date of such election to be
retroactive.
(e) The secretary shall notify each governmental entity of any determination made
as to its status as a subject employer, pursuant to KRS 341.070 and the
effective date of any election or termination made pursuant to this subsection
which determinations shall be subject to appeal and review in accordance with
the provisions of KRS 341.430(2).
Payment in lieu of contributions shall be made in accordance with the provisions of
this subsection.
(a)
(b)
(c)
(d)
(e)
(3)
(a)
(b)
(c)
At the end of each calendar quarter or at the end of any other period as
determined by the secretary, the cabinet shall bill each governmental entity (or
group of governmental entities) which has elected to make payments in lieu of
contributions an amount equal to all regular benefits and all extended benefits
paid during such quarter for compensable weeks occurring on or after January
1, 1979, plus any prior period adjustments which are attributable to service
performed in covered employment in the employ of such governmental entity
plus interest on the total amount billed at the average rate of earnings in the
unemployment insurance fund for the prior calendar year. All interest
collected under this subsection shall be credited to the unemployment
insurance fund.
Payment of any bill rendered under paragraph (a) of this subsection shall be
made not later than thirty (30) days after such bill was mailed to the last
known address of the governmental entity or was otherwise delivered to it,
unless there has been an application for review in accordance with paragraph
(d) of this subsection.
Payments made by any governmental entity under the provisions of this
subsection shall not be deducted or deductible, in whole or in part, from the
remuneration of workers in the employ of the governmental entity.
The amount due specified in any bill from the secretary shall be conclusive on
the governmental entity unless, not later than fifteen (15) days after the bill
was mailed to its last known address or otherwise delivered to it, the
governmental entity files an appeal to the commission, setting forth the
grounds for such appeal. Proceedings on appeal to the commission from the
amount of a bill rendered under this subsection shall be in accordance with the
provisions of KRS 341.430 and the decision of the commission shall be
subject to review under the provisions of KRS 341.460(1).
Past-due payments of amounts in lieu of contributions shall be subject to the
same interest, penalties, and collection provisions that, pursuant to KRS
341.300, apply to past due contributions.
The secretary may, in accordance with regulations prescribed by the
commission, require any governmental entity that elects to become liable for
payments in lieu of contributions to deposit with the cabinet within thirty (30)
days after the effective date of its election as a condition thereof, money equal
to two percent (2%) of the governmental entity's total wages paid for
employment as defined in KRS 341.050(1)(d) for the four (4) calendar
quarters immediately preceding the effective date of such election. If the entity
did not pay wages in each of such four (4) quarters, the amount of deposit, if
required, shall be determined by the secretary.
Provided, however, that the amount of money required to be deposited under
this paragraph shall not exceed the amount for which any contributing
employer would be liable if subject to the maximum contribution rate
applicable to the annual taxable payroll.
Money deposited in accordance with this subsection shall be retained by the
(4)
(5)
cabinet in an escrow account until all possible liability to the fund under the
election is terminated, at which time it shall be returned to the governmental
entity, less any deductions as hereinafter provided. The cabinet may deduct
from the money deposited under this subsection by a governmental entity to
the extent necessary to satisfy any due and unpaid payments in lieu of
contributions and any applicable interest and penalties provided for in
paragraph (e) of subsection (3) of this section. The secretary shall require the
governmental entity within thirty (30) days following any deduction from a
money deposit under the provisions of this subsection to deposit sufficient
additional money to make whole the governmental entity's deposit at the prior
level. The secretary may, at any time, review the adequacy of the deposit made
by any governmental entity. If, as a result of such review, he determines that
an adjustment is necessary, he shall require the governmental entity to make
an additional deposit within thirty (30) days of written notice of his
determination or shall return to it such portion of the deposit as he no longer
considers necessary, whichever action is appropriate.
(d) If any governmental entity fails to make a deposit, or to increase or make
whole the amount of a previously made deposit, as provided under this
subsection, the secretary may terminate such governmental entity's election to
make payments in lieu of contributions and such termination shall continue
for not less than the remainder of that calendar year and the following
calendar year beginning with the quarter in which such termination becomes
effective; provided, that the secretary may extend for good cause the
applicable filing, deposit or adjustment period by not more than sixty (60)
days.
If any governmental entity is delinquent in making payments in lieu of contributions
as required under subsection (3) of this section, the secretary may terminate such
governmental entity's election to make payments in lieu of contributions as of the
beginning of the next calendar year, and such termination shall be effective for that
and the next calendar year.
Notwithstanding any other section of this chapter, no employing unit electing to
make payments in lieu of contributions under the provisions of this section shall be
entitled to relief of benefit charges.
Effective: August 28, 2010
History: Amended 2010 (1st Extra. Sess.) Ky. Acts ch. 5, sec. 7, effective August 28,
2010. -- Amended 1996 Ky. Acts ch. 266, sec. 9, effective July 15, 1996. -- Created
1978 Ky. Acts ch. 389, sec. 17, effective July 1, 1978.
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