2005 Idaho Code - 72-1351A — FEDERAL CONFORMITY PROVISIONS REGARDING TRANSFERS OF EXPERIENCE AND ASSIGNMENT OF RATES

                                  TITLE  72
                      WORKER'S COMPENSATION AND RELATED
                        LAWS -- INDUSTRIAL COMMISSION
                                  CHAPTER 13
                           EMPLOYMENT SECURITY LAW
    72-1351A.  FEDERAL CONFORMITY PROVISIONS REGARDING TRANSFERS OF EXPERIENCE
AND ASSIGNMENT OF RATES. Notwithstanding any other provision of this chapter,
the following shall apply regarding transfers of experience and assignment of
rates:
    (1)  (a) If a covered employer transfers its trade or business, or a
    portion thereof, to another covered employer and, at the time of the
    transfer, there is substantially common ownership, management or control
    of the two (2) employers, then the experience rating account attributable
    to the transferred trade or business shall be transferred to the employer
    to whom such business is so transferred. The rates of both employers shall
    be recalculated using the methods provided in section 72-1351(5)(b) and
    (c)(i), Idaho Code.
    (b)  If, following a transfer of experience under paragraph (a) of this
    subsection (1), the director determines that a substantial purpose of the
    transfer of the trade or business was to obtain a reduced liability for
    contributions, then the experience rating accounts of the employers
    involved shall be combined into a single account and a single rate shall
    be assigned to such account.
    (2)  Whenever a person who is not a covered employer under this chapter at
the time such person acquires the trade or business of a covered employer, the
experience rating account of the acquired business shall not be transferred to
such person if the director finds that such person acquired the business
primarily for the purpose of obtaining a lower rate of contributions. Instead,
such person shall be assigned the standard rate for new employers under
section 72-1350, Idaho Code. In determining whether the trade or business was
acquired primarily for the purpose of obtaining a lower rate of contributions,
the director shall use objective factors which may include, but are not
limited to, the cost of acquiring the business, whether the person continued
the business enterprise of the acquired business, how long such business
enterprise was continued, or whether a substantial number of new employees
were hired for performance of duties unrelated to the business activity
conducted prior to acquisition.
    (3)  (a) It shall be a violation of this section if a person:
         (i)   Makes any false statement to the department when the maker
         knows the statement to be false or acts with deliberate ignorance of
         or reckless disregard for the truth of the matter or willfully fails
         to disclose a material fact to the department in connection with the
         transfer of a trade or business;
         (ii)  Prepares any false or antedated report, form, book, paper,
         record, written instrument, or other matter or thing in connection
         with the transfer of a trade or business with the intent to submit it
         or allow it to be submitted to the department as genuine or true;
         (iii) Knowingly violates or attempts to violate subsection (1) or (2)
         of this section or any other provision of this chapter related to
         determining the assignment of a contribution rate or an experience
         rate; or
         (iv)  Knowingly advises another person in a way that results in a
         violation or an attempted violation of subsection (1) or (2) of this
         section or any other provision of this chapter related to determining
         the assignment of a contribution rate or an experience rate.
    (b)  If a person commits any of the acts described in paragraph (a) of
    this subsection (3), the person shall be subject to the following
    penalties:
         (i)   If the person is a covered employer, a civil money penalty of
         ten percent (10%) of such person's taxable wages for the four (4)
         completed consecutive quarters preceding the violation shall be
         imposed for such year and said penalty shall be deposited in the
         state employment security administrative and reimbursement fund as
         established by section 72-1348, Idaho Code.
         (ii)  If the person is not a covered employer, such person shall be
         subject to a civil money penalty of not more than five thousand
         dollars ($5,000) for each violation. Any such penalty shall be
         deposited in the state employment security administrative and
         reimbursement fund as established by section 72-1348, Idaho Code.
    (4)  Every person who knowingly makes any false statement to the
department or knowingly fails to disclose a material fact to the department in
connection with the transfer of a trade or business, or knowingly prepares any
false or antedated report, form, book, paper, record, written instrument, or
other matter or thing in connection with the transfer of a trade or business
with the intent to submit it or allow it to be submitted to the department as
genuine or true, or knowingly violates or attempts to violate subsection (1)
or (2) of this section or any other provision of this chapter related to
determining the assignment of a contribution rate or an experience rate, or
knowingly advises another person to act in a way that results in a violation
or an attempted violation of subsection (1) or (2) of this section or any
other provision of this chapter related to determining the assignment of a
contribution rate or an experience rate, shall be guilty of a felony
punishable as provided in section 18-112, Idaho Code.
    (5)  For purposes of this section:
    (a)  An employer's experience rating account shall consist of the actual
    contribution, benefit and taxable payroll experience of the employer and
    any amounts due from the employer under this chapter. When a transferred
    experience rating account includes amounts due from the employer under
    this chapter, both the predecessor employer and the successor employer
    shall be jointly and severally liable for those amounts.
    (b)  "Knowingly" means having actual knowledge of or acting with
    deliberate ignorance of or reckless disregard for the prohibition
    involved.
    (c)  "Person" has the meaning given such term by section 7701(a)(1) of the
    Internal Revenue Code of 1986 (26 U.S.C. 7701(a)(1)).
    (d)  A "transfer of a trade or business" occurs whenever a person in any
    manner succeeds to all or a portion of a trade or business.
    (e)  "Trade or business" includes, but is not limited to, the employer's
    workforce. The transfer of some or all of an employer's workforce to
    another employer shall be considered a transfer of a trade or business
    when, as the result of such transfer, the transferring employer no longer
    performs trade or business with respect to the transferred workforce, and
    such trade or business is performed by the employer to whom the workforce
    is transferred.
    (f)  "Violates or attempts to violate" includes, but is not limited to,
    intent to evade, misrepresentation or willful nondisclosure.
    (6)  The director shall establish procedures to identify the transfer or
acquisition of a business for purposes of this section.
    (7)  This section shall be interpreted and applied in such a manner as to
meet the minimum requirements contained in any guidance or regulations issued
by the United States department of labor.