N.Y. Labor Law § 581: Experience rating

§ 581. Experience rating. 1. Meaning of terms. As used in this

section:

(a) "Computation date" means December thirty-first of any year.

(b) "Payroll year" means the period beginning on October first of a

year and ending on September thirtieth of the next following year.

(c) "Qualified employer" means any employer whose account reflects his

or her experience with respect to unemployment throughout not less than

the four consecutive completed calendar quarters ending on the

computation date and who has paid some remuneration in the payroll year

preceding the computation date and filed all contribution returns

prescribed by the commissioner for the three payroll years preceding the

computation date on or before such date, or has had an amount of

contributions due and/or an amount of wages paid determined by the

commissioner pursuant to section five hundred seventy-one of this

article. If an employer has ceased to be liable for contributions and

the employer's account balance is not subject to transfer under the

provisions of subdivision four of this section, such account balance

shall be transferred to the general account on the computation date

coinciding with or immediately following the date on which the

employer's liability ceased and shall not thereafter be available to

such employer in the event that the employer again becomes liable for

contributions.

(d) "Employer's account" (1) means an account in the fund reflecting

an employer's experience with respect to contribution payments and

experience rating charges under this article. The commissioner shall

maintain such an account for every employer liable for contributions

under this article; but nothing in this article shall be construed to

grant any employer or any of his employees prior claims or rights to the

amount paid by him into the fund and credited to his employer's account,

or to any other account, including the general account, either on his

own behalf or on behalf of his employees. All moneys in such fund, from

whatever source derived and to whatever account credited, shall be

pooled and available to pay benefits to any individual entitled thereto

under this article.

(2) Any contributions due but not paid within sixty days of the due

date prescribed by regulation of the commissioner shall, when paid, not

be credited to an employer's account, but shall be credited to the

general account, unless such payment was made prior to determination and

demand by the commissioner pursuant to section five hundred seventy-one

of this article.

(3) Payments in lieu of contributions equal to benefits charged in

the last three months of a calendar year shall be credited to the

employer's account as of the computation date occurring in that year if

paid within the time prescribed by the commissioner.

(4) Any employer may at any time make payments to his account in the

fund in excess of the requirements of this article. Such payments made

during the period from April first through March thirty-first of the

following year shall be credited to the employer's account as of the

computation date occurring within such period.

(5) For the purpose of determining the size of fund index, all

payments in lieu of contributions and voluntary, excess contribution

payments made by employers shall be included in the fund balance on the

computation date next following the date of payments. Such excess

contributions shall be irrevocable and not subject to refund or credit

after acceptance by the commissioner and deposit in the fund.

(e) "Experience rating charge" means a debit to an employer's account

reflecting a payment of benefits.

(1) Whenever benefits are paid to a claimant, experience rating

charges shall be debited to the appropriate account. The commissioner

shall notify each employer not more frequently than monthly as to each

experience rating charge which is being made to the employer's account.

Such notice shall be a determination of the propriety of such charge and

of the payment of benefits on which such charge was based.

(2) Benefits payable to any claimant with respect to the claimant's

then current benefit year shall be charged, when paid, to the account of

the last employer prior to the filing of a valid original claim in an

amount equal to seven times the claimant's benefit rate. Thereafter,

such charges shall be made to the account of each employer in the base

period used to establish the valid original claim in the same proportion

that the remuneration paid by each employer to the claimant during that

base period bears to the remuneration paid by all employers to the

claimant during that base period except as provided below:

(i) In those instances where the claimant may not utilize wages paid

to establish entitlement based upon subdivision ten of section five

hundred ninety of this article and an educational institution is the

claimant's last employer prior to the filing of the claim for benefits,

or the claimant performed services in such educational institution in

such capacity while employed by an educational service agency which is

the claimant's last employer prior to the filing of the claim for

benefits, such employer shall not be liable for benefit charges in an

amount equal to the benefit paid for seven weeks of total employment as

otherwise provided by this section. Under such circumstances, benefits

paid shall be charged to the general account. In addition, wages paid

during the base period by such educational institutions, or for services

in such educational institutions for claimants employed by an

educational service agency shall not be considered base period wages

during periods that such wages may not be used to gain entitlement to

benefits pursuant to subdivision ten of section five hundred ninety of

this article.

(ii) In those instances where the claimant may not utilize wages paid

to establish entitlement based upon subdivision eleven of section five

hundred ninety of this article and an educational institution is the

claimant's last employer prior to the filing of the claim for benefits,

or the claimant performed services in such educational institution in

such capacity while employed by an educational service agency which is

the claimant's last employer prior to the filing of the claim for

benefits, such employer shall not be liable for benefit charges in an

amount equal to the benefit paid for seven weeks of total employment as

otherwise provided by this section. Under such circumstances, benefits

paid will be charged to the general account. In addition, wages paid

during the base period by such educational institutions, or for services

in such educational institutions for claimants employed by an

educational service agency shall not be considered base period wages

during periods that such wages may not be used to gain entitlement to

benefits pursuant to subdivision eleven of section five hundred ninety

of this article. However, in those instances where a claimant was not

afforded an opportunity to perform services for the educational

institution for the next academic year or term after reasonable

assurance was provided, such employer shall be liable for benefit

charges as provided for in this paragraph for any retroactive payments

made to the claimant.

(iii) In those instances where the federal government is the

claimant's last employer prior to the filing of the claim for benefits

and such employer is not a base-period employer, payments equaling an

amount equal to the benefit paid for seven weeks of total employment as

otherwise prescribed by this section shall be charged to the general

account. In those instances where the federal government is the

claimant's last employer prior to the filing of the claim for benefits

and a base-period employer, such employer shall be liable for charges

for all benefits paid on such claim in the same proportion that the

remuneration paid by such employer during the base period bears to the

remuneration paid by all employers during the base period. In addition,

benefit payment charges in an amount equal to the benefit paid for seven

weeks of total employment other than those chargeable to the federal

government as prescribed above shall be made to the general account.

(iv) In those instances where a combined wage claim is filed pursuant

to interstate reciprocal agreements and the claimant's last employer

prior to the filing of the claim is an out-of-state employer and such

employer is not a base-period employer, benefit payments in an amount

equal to the benefit paid for seven weeks of total employment as

otherwise prescribed by this section shall be charged to the general

account. In those instances where the out-of-state employer is the last

employer prior to the filing of the claim for benefits and a base-period

employer such employer shall be liable for charges for all benefits paid

on such claim in the same proportion that the remuneration paid by such

employer during the base period bears to the remuneration paid by all

employers during the base period. In addition, benefit payment charges

in an amount equal to the benefit paid for seven weeks of total

employment other than those chargeable to the out-of-state employer as

prescribed above shall be made to the general account.

(v) In those instances where the last employer prior to the filing of

a valid original claim has paid total remuneration to the claimant

during the period from the start of the base period used to establish

the benefit claim until the date of the claimant's filing of the valid

original claim in an amount less than or equal to six times the

claimant's benefit rate and the last employer has substantiated such

amount to the satisfaction of the commissioner within ten days of the

commissioner's original notice of potential charges to such last

employer's account, benefits shall be charged as follows: benefits

payable to the claimant with respect to the claimant's then current

benefit year shall be charged, when paid, to the account of such last

employer prior to the filing of a valid original claim in an amount

equal to the lowest whole number (one, two, three, four, five, or six)

times the claimant's benefit rate where the product of such lowest whole

number times the claimant's benefit rate is equal to or greater than

such total remuneration paid by such last employer to the claimant.

Thereafter, such charges shall be made to the account of each employer

in the base period used to establish the valid original claim in the

same proportion that the remuneration paid by each employer to the

claimant during that base period bears to the remuneration paid by all

employers to the claimant during that base period. Notice of such

recalculation of potential charges shall be given to the last employer

and each employer of the claimant in the base period used to establish

the valid original claim.

(3) An employer's account shall not be charged, and the charges shall

instead be made to the general account, for benefits paid to a claimant

after the expiration of a period of disqualification from benefits

following a final determination that the claimant lost employment with

the employer through misconduct or voluntary separation of employment

without good cause within the meaning of section five hundred

ninety-three of this article and the charges are attributable to

remuneration paid during the claimant's base period of employment with

such employer prior to the claimant's loss of employment with such

employer through misconduct or voluntary separation of employment

without good cause, provided, however, that an employer shall not be

relieved of charges pursuant to this subparagraph if an employer or its

agent fails to submit information resulting in an overpayment pursuant

to section five hundred ninety-seven of this article.

(4) An employer's account shall not be charged, and the charges shall

instead be made to the general account, for benefits paid to a claimant

based on base period employment while the claimant was an incarcerated

individual of a correctional institution and enrolled in a work release

program, provided that the employment was terminated solely because the

incarcerated individual was required to relocate to another area as a

condition of parole or the incarcerated individual voluntarily relocated

to another area immediately upon being released or paroled from such

correctional institution.

(5) If an employer who employed the claimant in the four weeks

immediately preceding the filing of a valid original claim demonstrates

that the employer has continuously employed the claimant without

significant interruption and substantially to the same extent and in the

same manner as during the weeks immediately preceding the filing of a

valid original claim in which the claimant was employed by such

employer, the account of such employer shall not be charged with

benefits paid to such claimant for any weeks of such continuing

employment, and such experience rating charges shall be made to the

general account. The provisions set forth in the foregoing sentence

shall apply with respect to an employer liable for payments in lieu of

contributions, but if the secretary of labor of the United States finds

that their application to such employer does not meet the requirements

of the federal unemployment tax act, such provisions shall not

thereafter apply to such employer, unless and until such finding has

been set aside pursuant to a final decision issued in accordance with

such judicial review proceedings as may be instituted and completed

under the provisions of section thirty-three hundred ten of the federal

unemployment tax act.

(6) An employer's account shall not be debited to the extent that the

federal government reimburses the fund for benefits paid.

If on any computation date an employer's account registers a negative

balance, an amount equivalent to the excess of the negative balance over

twenty-one per centum of the employer's payroll in the payroll year

preceding such date shall be transferred as a charge to the general

account, except that this provision shall not apply to any negative

balance, or that portion thereof, which results from benefits charged

with respect to which the employer is liable for payments in lieu of

contributions.

(f) "Employer's account percentage" means the status of an employer's

account on any computation date. It is the balance remaining in the

account, after contributions have been credited and experience rating

charges have been debited to it, stated as percentage of his average

payroll for the last five payroll years preceding the computation date

or for all quarters if the employer has been liable for contributions

for fewer than twenty-one quarters. Such percentage shall be computed to

two decimal places and the remaining fraction if any, disregarded. If,

however, the number of consecutive completed calendar quarters ending on

the computation date during which the employer has been liable for

contributions hereunder is twenty-one or less the employer's account

percentage, if it is positive, shall be multiplied by that figure

assigned to the employer designated as "employer's benefit equalization

factor" which is listed below on the same horizontal line on which the

number of quarters of employer liability appears, and the product

resulting therefrom shall constitute the employer's account percentage.

Number of quarters Employer's benefit

of employer liability equalization factor

5 ...................................... 3.00

6 ...................................... 2.50

7 ...................................... 2.05

8 ...................................... 1.75

9 ...................................... 1.55

10 ..................................... 1.40

11 ..................................... 1.25

12 ..................................... 1.12

13 ..................................... 1.04

14 through 21........................... 1.00

(g) "Size of fund index" means the lesser of the following two

percentages:

(1) the percentage obtained by dividing the moneys in the fund as of a

computation date by the total of all payrolls for the payroll year

preceding such date; or (2) the percentage obtained by dividing such

moneys by the average of the totals of all payrolls for the five

consecutive payroll years preceding such date. Such percentage shall be

computed to one decimal place and the remaining fraction, if any,

disregarded.

(h) "Payroll" means all wages paid by an employer to his employees.

2. Rates of contribution.

(a) Each qualified employer's rate of contribution shall be the

percentage shown in the column headed by the size of the fund index as

of the computation date and on the same line with his or her negative or

positive employer's account percentage, except that if within the three

payroll years preceding the computation date any part of a negative

balance has been transferred from any employer's account as a charge to

the general account pursuant to the provisions of paragraph (e) of

subdivision one of this section such employer's rate of contribution

shall be the maximum contribution rate as shown in the column headed by

the size of fund index;

Size of Fund Index

Employer's

Account

Percentage Less 0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%

Than but but but but but but but but but but or

0% less less less less less less less less less less more

than than than than than than than than than than

0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%

Negative

21.0%

or more 8.90 8.70 8.50 8.30 8.10 7.30 6.90 6.50 6.20 6.10 6.00 5.90

20.5%

or more

but less

than 21.0% 8.80 8.60 8.40 8.20 8.00 7.20 6.80 6.40 6.10 6.00 5.90 5.80

20.0%

or more

but less

than 20.5% 8.70 8.50 8.30 8.10 7.90 7.10 6.70 6.30 6.00 5.90 5.80 5.70

19.5%

or more

but less

than 20.0% 8.60 8.40 8.20 8.00 7.80 7.00 6.60 6.20 5.90 5.80 5.70 5.60

19.0%

or more

but less

than 19.5% 8.50 8.30 8.10 7.90 7.70 6.90 6.50 6.10 5.80 5.70 5.60 5.50

18.5%

or more

but less

than 19.0% 8.40 8.20 8.00 7.80 7.60 6.80 6.40 6.00 5.70 5.60 5.50 5.40

18.0%

or more

but less

than 18.5% 8.30 8.10 7.90 7.70 7.50 6.70 6.30 5.90 5.60 5.50 5.40 5.30

17.5%

or more

but less

than 18.0% 8.20 8.00 7.80 7.60 7.40 6.60 6.20 5.80 5.50 5.40 5.30 5.20

17.0%

or more

but less

than 17.5% 8.10 7.90 7.70 7.50 7.30 6.50 6.10 5.70 5.40 5.30 5.20 5.10

16.5%

or more

but less

than 17.0% 8.00 7.80 7.60 7.40 7.20 6.40 6.00 5.60 5.30 5.20 5.10 5.00

16.0%

or more

but less

than 16.5% 7.90 7.70 7.50 7.30 7.10 6.30 5.90 5.50 5.20 5.10 5.00 4.90

15.5%

or more

but less

than 16.0% 7.80 7.60 7.40 7.20 7.00 6.20 5.80 5.40 5.10 5.00 4.90 4.80

15.0%

or more

but less

than 15.5% 7.70 7.50 7.30 7.10 6.90 6.10 5.70 5.30 5.00 4.90 4.80 4.70

14.5%

or more

but less

than 15.0% 7.60 7.40 7.20 7.00 6.80 6.00 5.60 5.20 4.90 4.80 4.70 4.60

14.0%

or more

but less

than 14.5% 7.50 7.30 7.10 6.90 6.70 5.90 5.50 5.10 4.80 4.70 4.60 4.50

13.5%

or more

but less

than 14.0% 7.40 7.20 7.00 6.80 6.60 5.80 5.40 5.00 4.70 4.60 4.50 4.40

13.0%

or more

but less

than 13.5% 7.30 7.10 6.90 6.70 6.50 5.70 5.30 4.90 4.60 4.50 4.40 4.30

12.5%

or more

but less

than 13.0% 7.20 7.00 6.80 6.60 6.40 5.60 5.20 4.80 4.50 4.40 4.30 4.20

12.0%

or more

but less

than 12.5% 7.10 6.90 6.70 6.50 6.30 5.50 5.10 4.70 4.40 4.30 4.20 4.10

11.5%

or more

but less

than 12.0% 7.00 6.80 6.60 6.40 6.20 5.40 5.00 4.60 4.30 4.20 4.10 4.00

11.0%

or more

but less

than 11.5% 6.90 6.70 6.50 6.30 6.10 5.30 4.90 4.50 4.20 4.10 4.00 3.90

10.5%

or more

but less

than 11.0% 6.80 6.60 6.40 6.20 6.00 5.20 4.80 4.40 4.10 4.00 3.90 3.80

10.0%

or more

but less

than 10.5% 6.70 6.50 6.30 6.10 5.90 5.10 4.70 4.30 4.00 3.90 3.80 3.70

9.5%

or more

but less

than 10.0% 6.60 6.40 6.20 6.00 5.80 5.00 4.60 4.20 3.90 3.80 3.70 3.60

9.0%

or more

but less

than 9.5% 6.50 6.30 6.10 5.90 5.70 4.90 4.50 4.10 3.80 3.70 3.60 3.50

8.5%

or more

but less

than 9.0% 6.40 6.20 6.00 5.80 5.60 4.80 4.40 4.00 3.70 3.60 3.50 3.40

8.0%

or more

but less

than 8.5% 6.30 6.10 5.90 5.70 5.50 4.70 4.30 3.90 3.60 3.50 3.40 3.30

7.0%

or more

but less

than 8.0% 6.20 6.00 5.80 5.60 5.40 4.60 4.20 3.80 3.50 3.40 3.30 3.20

6.0%

or more

but less

than 7.0% 6.10 5.90 5.70 5.50 5.30 4.50 4.10 3.70 3.40 3.30 3.20 3.10

5.0%

or more

but less

than 6.0% 6.00 5.80 5.60 5.40 5.20 4.40 4.00 3.60 3.30 3.20 3.10 3.00

4.0%

or more

but less

than 5.0% 5.90 5.70 5.50 5.30 5.10 4.30 3.90 3.50 3.20 3.10 3.00 2.90

3.0%

or more

but less

than 4.0% 5.60 5.40 5.20 5.00 4.80 4.20 3.80 3.40 3.10 3.00 2.90 2.80

2.0%

or more

but less

than 3.0% 5.50 5.30 5.10 4.90 4.70 4.10 3.70 3.30 3.00 2.90 2.80 2.70

1.0%

or more

but less

than 2.0% 5.40 5.20 5.00 4.80 4.60 4.00 3.60 3.20 2.90 2.80 2.70 2.60

Less

than 1.0% 5.20 5.00 4.80 4.60 4.40 3.80 3.40 3.00 2.70 2.60 2.50 2.40

Positive

Less

than 1.0% 4.10 3.90 3.70 3.50 3.30 2.90 2.50 2.10 1.90 1.80 1.70 1.60

1.0%

or more

but less

than 2.0% 4.00 3.80 3.60 3.40 3.20 2.80 2.40 2.00 1.80 1.70 1.60 1.50

2.0%

or more

but less

than 3.0% 3.90 3.70 3.50 3.30 3.10 2.70 2.30 1.90 1.70 1.60 1.50 1.40

3.0%

or more

but less

than 4.0% 3.80 3.60 3.40 3.20 3.00 2.60 2.20 1.80 1.60 1.50 1.40 1.30

4.0%

or more

but less

than 5.0% 3.70 3.50 3.30 3.10 2.90 2.50 2.10 1.70 1.50 1.40 1.30 1.20

5.0%

or more

but less

than 5.5% 3.60 3.40 3.20 3.00 2.80 2.40 2.00 1.60 1.40 1.30 1.20 1.10

5.5%

or more but

less than

5.75% 3.50 3.30 3.10 2.90 2.70 2.30 1.90 1.50 1.30 1.20 1.10 1.00

5.75%

or more

but less

than 6.0% 3.40 3.20 3.00 2.80 2.60 2.20 1.80 1.40 1.20 1.10 1.00 0.90

6.0%

or more but

less than

6.25% 3.30 3.10 2.90 2.70 2.50 2.10 1.70 1.30 1.10 1.00 0.90 0.80

6.25%

or more

but less

than 6.5% 3.20 3.00 2.80 2.60 2.40 2.00 1.60 1.20 1.00 0.90 0.80 0.70

6.5%

or more but

less than

6.75% 3.10 2.90 2.70 2.50 2.30 1.90 1.50 1.10 0.90 0.80 0.70 0.60

6.75%

or more

but less

than 7.0% 3.00 2.80 2.60 2.40 2.20 1.80 1.40 1.00 0.80 0.70 0.60 0.50

7.0%

or more but

less than

7.25% 2.90 2.70 2.50 2.30 2.10 1.70 1.30 0.90 0.70 0.60 0.50 0.40

7.25%

or more

but less

than 7.5% 2.80 2.60 2.40 2.20 2.00 1.60 1.20 0.80 0.60 0.50 0.40 0.30

7.5%

or more but

less than

7.75% 2.70 2.50 2.30 2.10 1.90 1.50 1.10 0.70 0.50 0.40 0.30 0.20

7.75%

or more

but less

than 8.0% 2.60 2.40 2.20 2.00 1.80 1.40 1.00 0.60 0.40 0.30 0.20 0.10

8.0%

or more but

less than

8.25% 2.50 2.30 2.10 1.90 1.70 1.30 0.90 0.50 0.30 0.20 0.10 0.00

8.25%

or more

but less

than 8.5% 2.40 2.20 2.00 1.80 1.60 1.20 0.80 0.40 0.20 0.10 0.00 0.00

8.5%

or more but

less than

8.75% 2.30 2.10 1.90 1.70 1.50 1.10 0.70 0.30 0.10 0.00 0.00 0.00

8.75%

or more

but less

than 9.0% 2.20 2.00 1.80 1.60 1.40 1.00 0.60 0.20 0.00 0.00 0.00 0.00

9.0%

or more but

less than

9.25% 2.10 1.90 1.70 1.50 1.30 0.90 0.50 0.10 0.00 0.00 0.00 0.00

9.25%

or more

but less

than 9.5% 2.00 1.80 1.60 1.40 1.20 0.80 0.40 0.00 0.00 0.00 0.00 0.00

9.5%

or more but

less than

9.75% 1.90 1.70 1.50 1.30 1.10 0.70 0.30 0.00 0.00 0.00 0.00 0.00

9.75%

or more but

less than

10.0% 1.80 1.60 1.40 1.20 1.00 0.60 0.20 0.00 0.00 0.00 0.00 0.00

10.0%

or more but

less than

10.25% 1.70 1.50 1.30 1.10 0.90 0.50 0.10 0.00 0.00 0.00 0.00 0.00

10.25%

or more but

less than

10.5% 1.60 1.40 1.20 1.00 0.80 0.40 0.00 0.00 0.00 0.00 0.00 0.00

10.5%

or more 1.50 1.30 1.10 0.90 0.70 0.30 0.00 0.00 0.00 0.00 0.00 0.00

(aa) (i) If a qualified employer, with a minimum of seventeen quarters

of liability, has an account percentage which is negative on any

computation date and the total wages paid by such employer in the

preceding payroll year, is greater than or equal to eighty percent of

the previous three payroll year's average total wages paid by the

employer, then such employer's account percentage for the subsequent

year shall be improved by four percentage points for purposes of

determining the employer's rate of contribution. However, in no event

shall the resulting rate of contribution after such adjustment be less

than 6.1 percent. Such adjustment to the employer's account percentage

shall be applicable only to the employer's current rate of contribution

and the application of such adjustment shall be redetermined annually.

(ii) The terms "qualified employer", "employer's account percentage",

"computation date", "wages", "payroll year" and "rate of contribution"

shall have the meaning prescribed pursuant to article eighteen of this

chapter.

(b) Penalty for failure to file required returns. (1) In the case of a

failure by an employer to file a quarterly combined withholding wage

reporting and unemployment insurance return required by paragraph four

of subsection (a) of section six hundred seventy-four of the tax law,

there shall be imposed a penalty of five percent of the amount of

contributions required to be shown on such return (including the amount

of any assessment or modification made pursuant to this section) if the

failure is for not more than one month with an additional five percent

penalty for each additional month or fraction thereof during which such

failure continues, not exceeding twenty-five percent in the aggregate.

(2) The penalty provided for failure to file a return under this

paragraph shall not be less than one hundred dollars for each

occurrence.

(3) For purposes of this paragraph, the amount of contributions

required to be shown on such return shall be reduced by the amount of

any part of the contributions due which is paid on or before the date

the return is required to be filed and by the amount of any credit to

the contributions due which may be claimed upon such return.

(4) For other penalties relating to failure to file the quarterly

combined withholding, wage reporting and unemployment insurance return,

see paragraph one of subsection (v) of section six hundred eighty-five

of the tax law.

(5) The penalties imposed and collected pursuant to this paragraph

shall be credited to the unemployment insurance control fund established

pursuant to section five hundred fifty-two-b of this article.

(c) The rate for any employer who has not qualified under the

provisions of paragraph (c) of subdivision one of this section solely

because he has not been liable for contributions during at least the

five completed calendar quarters ending on the computation date, or

because he has not paid any remuneration in the payroll year preceding

the computation date, shall be equal to the rate which applies pursuant

to paragraph (a) of this subdivision to an employer who has a positive

account percentage of less than one percentum, except that the rate for

such employer shall in no event exceed three and four-tenths per centum.

(d) The rates established in accordance with the provisions of this

subdivision shall apply with respect to wages paid in the four

consecutive calendar quarters immediately following the computation

date.

3. Joint accounts. Any two or more qualified employers engaged in the

same or a related trade, occupation, profession or enterprise, or having

a common financial interest may apply to the commissioner to establish a

joint account or to merge their several individual accounts in a joint

account. The commissioner shall prescribe rules and regulations for the

establishment, maintenance and dissolution of joint accounts. A joint

account shall be maintained as if it constituted a single employer's

account. Rules established by the commissioner pursuant to the

provisions of this subdivision shall be promulgated only after notice

and public hearing.

4. Transfers of accounts. (a) Where an employer subsequent to July

first, nineteen hundred fifty-one, transfers his or its organization,

trade or business in whole or in part, the transferee shall take over

and continue the employer's account, including its balance and all other

aspects of its experience under this article, in proportion to the

payroll or employees assignable to the transferred organization, trade

or business determined for the purpose of this article by the

commissioner. The account taken over by the transferee shall remain

chargeable with respect to benefits based on employment in the

transferred organization, trade or business, and all such employment

shall be deemed employment performed for the transferee.

(b) The rate of contribution applicable to the accounts of the

transferee and the transferring employer with respect to the calendar

year in which the transfer occurred shall be respectively determined or

redetermined as of the computation date in the preceding calendar year,

and such rates shall apply from the date of the transfer to the end of

the calendar year in which the transfer occurred. The rate of

contribution applicable to the accounts of the transferee and the

transferring employer with respect to the calendar year following the

calendar year in which the transfer occurred shall be respectively

determined or redetermined as of the computation date in the same

calendar year. The commissioner shall allocate to the transferee's

account for each period in question the proportion of the transferring

employer's payroll, which the commissioner determines to be properly

assignable to the organization, trade or business transferred.

(c) No transfer shall be deemed to have occurred if the commissioner

on his own motion or on application of any interested party finds that

all of the following conditions exist:

(1) the transferee has not assumed any of the transferring employer's

obligations, and

(2) the transferee has not acquired any of the transferring employer's

good will, and

(3) the transferee has not continued or resumed the business of the

transferring employer either in the same establishment or elsewhere, and

(4) the transferee has not employed substantially the same employees

as those the transferring employer had employed in connection with the

organization, trade, business, or part thereof transferred.

(d) No transfer shall be deemed to have occurred unless either the

transferring employer or the transferee has given notice of the transfer

to the commissioner prior to the termination of the calendar year

following the calendar year in which the transfer occurred.

5. Interstate transfer of experience. An employer who transfers all or

a segregable part of his operations from another state to this state

shall be deemed to be a qualified employer within the meaning of this

section as of the computation date next following the transfer,

provided:

(a) that he has paid wages subject to the federal unemployment tax act

for eighteen consecutive completed calendar quarters immediately

preceding the computation date;

(b) that he notifies the commissioner of the transfer of operations

prior to the computation date;

(c) that he certifies to the commissioner all information with respect

to the transferred operations which the commissioner determines to be

necessary; and

(d) that he certifies to the commissioner at such times as the

commissioner prescribes all information which the commissioner

determines to be necessary with respect to benefits paid subsequent to

the transfer and prior to each computation date on the basis of wages

paid in such other state.

Wages, remuneration, contributions and benefits resulting in

experience rating charges in connection with the transferred operations

shall be deemed to have been paid in this state for the purposes of this

section.

In computing such employer's balance applicable to the transferred

operations, the commissioner shall consider only the fourteen most

recently elapsed calendar quarters prior to the computation date. Any

balance set up under this subdivision shall be debited to the general

account; and benefits subsequently paid based on wages paid in such

other state shall be charged to the employer's account and credited to

the general account.

6. Corrections and modifications. Corrections or modifications of an

employer's payroll, experience rating charges, or any other pertinent

factor shall not be taken into account for the purpose of a

determination or redetermination of the employer's contribution rate,

unless such corrections or modifications were established on or before

the computation date; except that they shall be taken into account

whenever established if the employer filed false returns with intent to

defraud or, with respect to payroll, failed to file returns prior to the

computation date such that an amount of contributions due from such

employer and/or an amount of wages paid by such employer was required to

be determined by the commissioner pursuant to section five hundred

seventy-one of this article and such corrections or modifications result

in a rate higher than the contribution rate determined by the

commissioner or, with respect to experience rating charges, if they

result from a referee, appeal board, or court decision.

7. Certain transfers. Notwithstanding any other provision of law, the

following shall apply regarding assignment of rates and transfers of

experience:

(a)(1) If an employer transfers its organization, trade or business,

or a portion thereof, to another employer and, at the time of the

transfer, there is at least ten percent common ownership, management or

control of the two employers, then the unemployment experience

attributable to the transferred organization, trade or business shall be

transferred to the employer to whom such organization, trade or business

is so transferred. In addition to the provisions of this subdivision,

the transfer provisions of paragraphs (a), (b) and (d) of subdivision

four of this section shall apply to such transfers. For purposes of this

subdivision "organization, trade or business" shall include the

employer's workforce.

(2) If, following a transfer of experience under subparagraph one of

this paragraph, the commissioner determines that a substantial purpose

of the transfer of the organization, 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.

(b) Whenever a person is not an employer liable for contributions

under this article at the time it acquires the organization, trade or

business of an employer, the unemployment experience of the acquired

business shall not be transferred to such person if the commissioner

finds that such person acquired the business solely or primarily for the

purpose of obtaining a lower rate of contributions. Instead, such person

shall be assigned a rate in accordance with paragraph (c) of subdivision

two of this section. In determining whether the organization, trade or

business was acquired solely or primarily for the purpose of obtaining a

lower rate of contributions, the commissioner shall evaluate factors

that include, but are not limited to the following:

(1) the cost of acquiring the organization, trade or business;

(2) whether the person continued the business enterprise of the

acquired business;

(3) how long such business enterprise was continued; or

(4) whether a substantial number of new employees were hired for

performance of duties unrelated to the business activity conducted prior

to acquisition.

(c)(1) If a person knowingly violates or attempts to violate

paragraphs (a) or (b) of this subdivision, then such person shall be

liable for the greater penalty of ten percent of such person's total

taxable wages in the last completed payroll year or ten thousand

dollars. Any such penalty shall be deposited in the control fund

established under section five hundred fifty-two-b of this article.

(2) If a person knowingly advises another person to violate or attempt

to violate paragraph (a) or (b) of this subdivision, then such advisor

shall be subject to a civil penalty of ten thousand dollars. Any such

penalty shall be deposited in the control fund established under section

five hundred fifty-two-b of this article.

(3) For purposes of this subdivision, the term "knowingly" means

having actual knowledge of or acting with deliberate ignorance or

reckless disregard for the prohibition involved.

(4) For purposes of this subdivision, the term "violates or attempts

to violate" includes, but is not limited to, intent to evade,

misrepresentation or wilful nondisclosure.

(5) In addition to the penalties imposed by subparagraphs one and two

of this paragraph, any violation of this subdivision shall be a class E

felony and is punishable by a term of imprisonment as prescribed in

section 70.00 of the penal law.

(d) The commissioner shall establish procedures to identify the

transfer or acquisition of a business for purposes of this subdivision.

(e) For purposes of this subdivision the term "person" has the meaning

given such term by section 7701 (a)(1) of the Internal Revenue Code of

1986, and shall also include an employer as defined in this article.