Sec. 31-223b. Transfer of unemployment experience upon transfer of assets, organization, trade or business of employer. Penalties.
Sec. 31-223b. Transfer of unemployment experience upon transfer of assets,
organization, trade or business of employer. Penalties. (a) For purposes of this
section:
(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 section 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 section 31-225a or, where applicable, the person's charged tax rate, as provided in subsection (e) of section 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 section 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.
(P.A. 05-85, S. 1; P.A. 06-196, S. 162.)
History: This section was originally published as Sec. 31-223a in the 2006 Supplement to the General Statutes; P.A.
06-196 made technical changes in Subsec. (d)(2), effective June 7, 2006.