§ 28-43-10 - Application of predecessor's payroll record to successor employer.
SECTION 28-43-10
§ 28-43-10 Application of predecessor'spayroll record to successor employer. – (a) Whenever any employing unit in any manner succeeds to, or has succeeded to,or acquires, or has acquired, the organization, trade, separate establishment(provided separate payroll reports have been filed with the director for theseparate establishment), or business, or substantially all the assets thereof,and whenever the successor was not prior to that acquisition an employing unitas that term is defined in § 28-42-3(16) of another which at the time ofthe acquisition was an employer subject to chapters 42 – 44 of this title,the predecessor employing unit shall be deemed to have relinquished all rightsto have its prior payroll records, or in the case of a separate establishmentthe prior payroll records of the establishment, used for the purpose ofdetermining experience rates of employer contributions for that predecessor,and the director shall use those prior payroll records for the purpose ofdetermining experience rates of employer contributions for that successor. Thatsuccessor shall, if not already an employer prior to that acquisition, becomean employer on the date of that acquisition, and for the purpose of determiningexperience rates of employer contributions the director shall hereafterconsider those prior payroll records of the predecessor as the payroll recordsof the successor, and the successor shall assume the position of thepredecessor or predecessors with respect to the payroll records of thepredecessor or predecessors as if there had been no change in the ownership ofthe organization, trade, separate establishment, business, or assets. If thesuccessor is an employer prior to the time of the transfer, it may continue topay employer contributions at the rate applicable to it from the date thetransfer occurred until the end of the then current tax year, or it may electto pay at the rate applicable to its predecessor for the balance of that year.If the successor is not an employer prior to the time of the transfer, it shallpay employer contributions at the rate applicable to the predecessor or, ifmore than one and the same rate is applicable to both, the rate applicable tothe predecessor or predecessors from the date the transfer occurred until theend of the then current tax year. If the successor is not an employer prior tothe time of the transfer and simultaneously acquires the businesses of two (2)or more employers to whom different rates of employer contributions areapplicable, it shall pay employer contributions at the highest rate applicableto those predecessors from the date transfers occurred until the end of thethen current tax year.
(ii) In all cases the rate of employer contributionsapplicable to the successor for each tax year beginning with the tax yearcommencing next after the transfer shall be computed on the basis of thecombined payroll records of the successor and of the predecessor orpredecessors. A successor shall be deemed to be an eligible employer if itsexperience combined with that of its predecessors meets the requirements of§ 28-43-1(3). As used in this section, "successor" means the employingunit to whom a transfer as provided in this section is made, and "predecessor"means the employer making the transfer and may, if the context so requires, beconstrued as referring only to the separate establishment transferred in caseof the transfer of a separate establishment.
(2) A successor to any portion of the business of itspredecessor shall have its rate determined based on its own unemploymentexperience combined with that portion of the predecessor's unemploymentexperience attributable to the share of the trade or business transferred tothe successor in the following manner:
(i) The total payroll of the employees on the predecessor'spayroll during the last completed calendar quarter prior to the date of thetransfer who are also on the payroll of the successor when the transfer takeseffect shall be divided by the predecessor's total payroll during the lastcompleted calendar quarter prior to the date of the transfer, and thatpercentage shall be applied to the experience rating balances and payroll ofthe predecessor as of the end of the experience year used to determine thecontribution rate for the tax year in effect at the date of transfer. Theresulting amounts shall be subtracted from the experience rating balances andpayroll of the predecessor. The predecessor's remaining experience ratingbalances and payroll shall be used to determine its contribution rate for thenew tax year or for the remainder of the current tax year, whichever isapplicable, effective on the first day of the calendar quarter following thedate of the transfer; provided, that if the date of the transfer is the firstday of the calendar quarter, then the new contribution rate shall take effecton the date of the transfer.
(ii) The balances subtracted from the predecessor's accountin subsection (i) of this section, shall be combined with the experience ratingbalances and payroll of the successor as of the end of the experience year usedto determine the contribution rate for the tax year in effect at the date oftransfer. Those combined balances shall be used to determine the contributionrate for the successor for the new tax year or for the remainder of the currenttax year, whichever is applicable, effective on the first day of the calendarquarter following the date of the transfer; provided, that if the date of thetransfer is the first day of the calendar quarter then the new contributionrate shall take effect on the date of the transfer. For successors in businessfor less than one experience year, their contribution rate for the new tax yearor for the remainder of the current tax year, whichever is applicable, shall becomputed based on the transferred experience rating balances and payroll of thepredecessor and shall take effect on the first day of the calendar quarterfollowing the date of the transfer; provided, that if the date of the transferis the first day of the calendar quarter then the new contribution rate shalltake effect on the date of the transfer.
(b) Any determination of the director under this sectionshall be final unless an appeal from it is filed by the aggrieved party withinfifteen (15) days from the date that notice is mailed to the last known addressof that party. All appeals shall follow the provision of § 28-43-13.