Unemployment Insurance Law Summaries
Pennsylvania, Unemployment Insurance Law Summaries
Pennsylvania's unemployment insurance law is located in Volume 43 of Purdon's Pennsylvania Statutes Annotated, as amended, Chapter 14, Secs. 751 et seq. (for full text, see Unemployment Insurance Reports UI-PA ¶4001 ); and in the Rules and Regulations Under the Pennsylvania Unemployment Compensation Law, Regulations 61.1 to 65.157.
DEFINITIONS
“Employer:” Employer of one or more individuals for some portion of a day during a calendar year.
“Employment:” Service, including service in interstate commerce and as a corporation officer, performed for pay under any contract of hire, with exceptions listed below. Service for pay is employment unless and until it is shown that worker is:
free from control or direction: and
engaged in independently established trade, occupation, profession, or business.
Service as an officer or member of a crew of an American vessel is covered if the office from which that vessel is managed and controlled is located in Pennsylvania. Services by certain agent-drivers or commission-drivers and traveling or city salespersons are covered.
“Employee:” Every individual, whether male, female, citizen, alien, or minor, who performs services for an employer in employment subject to law.
“Wages” means all remuneration paid for employment, including cash value of noncash pay (unless such noncash pay is paid for service not in the course of the employer's trade or business) and sick pay (unless paid under a worker's compensation law). Tips taxable under the FUTA are taxable under Pennsylvania law; FUTA covers tips that are received while performing services in employment and that are included in a written statement to the employer under IRC §6053. “Wages ” does not include:
Remuneration over $8,000 paid to an individual in a calendar year by an employer, counting remuneration paid by such employer's predecessor and by such employer (or its predecessor) for services covered in another state, but not including remuneration paid by another employer covered under Pa. law, or paid by another employer for out-of-state employment, whether or not covered by that state.
Other exclusions from wages are listed below.
Notwithstanding above provisions, term “wages” includes any remuneration subject to federal unemployment tax.
COVERAGE
Service, including service in interstate commerce and as a corporation officer, performed for pay under any contract of hire, with exceptions listed below. Service for pay is employment unless and until it is shown that worker is:
free from control or direction: and
engaged in independently established trade, occupation, profession, or business.
Service as an officer or member of a crew of an American vessel is covered if the office from which that vessel is managed and controlled is located in Pennsylvania. Services by certain agent-drivers or commission-drivers and traveling or city salesmen are covered.
Notwithstanding above provisions, generally, services are “employment” if federal unemployment tax is payable thereon.
Agricultural and domestic employers.- Services in agricultural labor are covered if performed for an employer who employs ten or more workers in such services in 20 weeks in either the current or preceding calendar year or pays cash remuneration of $20,000 for such services in any quarter of the current or preceding calendar year. When agricultural labor is supplied by a crew leader, the employing unit for which the services are performed is the employer of the crew members unless the crew leader is registered under the Farm Labor Contractor Registration Act of 1963, or substantially all of the crew members operate or maintain certain mechanized equipment that is provided by the crew leader. In either of these instances, the crew leader is the employer.
Domestic service.- Domestic service in a private home, local college club, or local chapter of a college fraternity or sorority is covered if performed for an employing unit that paid wages of $1,000 or more for such services in any quarter of the current or preceding calendar year.
Government and nonprofit employers.- Coverage is required regarding services performed for the state and for nonprofit organizations which are exempt from income tax. Services performed for political subdivisions are mandatorily covered. Other government services are not covered.
Services performed for a hospital or an institution of higher education are covered.
Nonprofit organizations have the option of financing the payment of benefits by either the regular contributions or the reimbursement methods. The state and political subdivisions which elect coverage prior to 1/1/78 must use the reimbursement method. Covered political subdivisions may pay contributions or elect to make payments in lieu of contributions.
Under reimbursement financing, employers make payments equal to the full amount of regular plus 50% (100% for political subdivisions) of extended benefits paid to claimants. Nonprofit organizations which elect the reimbursement method and political subdivisions which prior to 1/1/78 elect the reimbursement method are required to execute and file a surety bond or, in lieu thereof, to deposit money or securities.
Nonprofit organizations that change to contributions method after having made reimbursement payments pay 3.5% until eligible for a rate. Period during which reimbursement payments made is not taken into account for experience-rating purposes. Rate of 3.5% available only on first conversion from reimbursement to contributory status.
EXCEPTIONS
Wages.- “Wages” does not include:
Remuneration over $8,000 paid to an individual in a calendar year by an employer, counting remuneration paid by such employer's predecessor and by such employer (or his predecessor) for services covered in another state, but not including remuneration paid by another employer covered under Pennsylvania law, or paid by another employer for out-of-state employment, whether or not covered by that state.
Payments to individual under plan or system established on account of retirement or accident disability, etc.
Payments for sickness or accident disability made over six months after separation.
Payments to or on behalf of an individual or his or her beneficiary (a) from or to certain trusts exempt from income tax, (b) under or to certain annuity plans, or (c) under or to certain qualified bond-purchase plans.
Payment of employees' FICA tax without deduction from wages.
Payments to employees during period of military service, but payments while on temporary duty (two-week summer camp) constitute wages.
Notwithstanding above provisions, term “wages” includes any remuneration subject to federal unemployment tax.
Employment.- The term “employment” does not include:
Aircraft employees on non-American aircraft if the employee is employed on or in connection with an aircraft when outside the U.S.
Service not in the course of employer's trade or business, unless cash remuneration for such service is $50 or more and performed by an individual regularly employed by the employer to perform such service.
Insurance agents wholly on commission basis, and commission investment company salesmen.
Maritime employees on non-American vessels if the employee is employed on or in connection with the vessel when outside the U.S., and employees covered by federal maritime unemployment compensation system.
Newspaper correspondents who are unpaid or paid only for copy accepted for publication. Newspaper carriers under 18.
Nonresident, alien individuals temporarily in the U.S. as foreign students or exchange visitors in the carrying out of the purposes for which they were admitted.
Organizations exempt from income tax under section 501(a) of the Internal Revenue Code (other than organizations described in section 401(a) of said code) or under section 521 of the code, if the remuneration is less than $50.
Railroad employees and employee representatives covered by Railroad Unemployment Insurance Act.
Real estate salespersons and brokers on commission basis.
Relatives, i.e ., service performed by individual in employ of child or spouse, or by child under 18 in parent's employ (see also, “payments from family businesses” under “wages”).
Service for an international organization.
Service for a school, college or university by a student in regular attendance or by the spouse of that student if the spouse's employment is provided under a program of assistance to the student.
Service by a student under 22 enrolled at a nonprofit or public educational institution in a full-time work-study program. This exemption is not applicable to a program established for an employer or a group of employers.
Service for a hospital by a patient of the hospital.
Notwithstanding above provisions, generally, services are “employment” if federal unemployment tax is payable thereon.
Agricultural and domestic employers.- Service performed prior to 1/1/82 by certain aliens is excluded.
Government and nonprofit employers.- Coverage is required regarding services performed for the state and for nonprofit organizations which are exempt from income tax. Services performed for political subdivisions are mandatorily covered. Other government services are not covered.
Except for services performed for a hospital or an institution of higher education, the following services for the state or a political subdivision are not covered:
Elected officials.
Members of a legislative body or the judiciary.
Inmates of custodial and penal institutions receiving compensation for services rendered.
Department heads and members of boards and commissions appointed by the Governor.
Individuals on certain work-relief or job-training projects.
Members of the State National Guard or Air National Guard.
Temporary employees serving in case of fire, storm, snow, earthquake, flood or similar emergency.
Individuals serving in certain major nontenured policymaking or advisory positions.
Services for nonprofit organizations do not include the following (political subdivisions may also exclude these services):
Church or organization operated primarily for religious purposes and which is controlled by a church.
Minister or member of a religious order.
Patients performing services in a rehabilitation facility or sheltered workshop.
Individual receiving unemployment work-relief or work-training under a program financed by a federal agency or an agency of a state or political subdivision.
Inmate of a custodial or penal institution.
PROCEDURES
Base year.- First four of the last five completed quarters preceding benefit year.
Benefit year.- 52-consecutive-week period starting with valid application for benefits. If period ends within claim week, it may be extended to include such week.
Weekly benefit amount.- Minimum is $35. Maximum is computed as 66
% of statewide average weekly wage. Maximum for 2008 is $539. A claimant's weekly benefit amount is based on his or her high-quarter wages, or 50% of his or her full-time weekly wage, whichever is greater (with certain exceptions). Deductible from a claimant's weekly benefit amount are wages that exceed the greater of
a partial benefit credit of 40% of the claimant's weekly benefit rate, or
$6, in either case lowered to the next lower even dollar.
If the trigger percentage is under 50%, a 5% reduction will be required in weekly benefit amounts, except that no claimant whose weekly benefit rate is in excess of the weekly benefit rate immediately below the rate that is one-half of the maximum weekly benefit rate will have his or her weekly rate reduced below one-half of the maximum, except through the combined application of this reduction and any individual reduction required due to receipt of disqualifying remuneration. For these purposes, if one-half of the maximum is not a multiple of $1, it will be rounded down to the next lower multiple of $1. First in 1992 and each fifth year thereafter, the reduction in weekly benefit amounts will be redetermined so that the unrounded rates yield reductions that will produce certain dollar amounts specified in the law. Such redetermined reduction will go into effect for the next calendar year and will remain in effect for five years, before being redetermined.
In addition to the payment of regular benefits, dependents' benefits are payable at the rate of $5 for a dependent spouse, or $5 for a dependent child if the claimant has no spouse, plus $3 for one other dependent child. Dependents' allowances cannot exceed $8 per week, and the total number of such allowance payments may not exceed 39 weeks.
Vacation payments are deductible from a claimant's weekly benefit amount except if the claimant was permanently or indefinitely separated from his or her employment. Governmental or other pensions, retirement or retired pay, or any other similar periodic payment based on the claimant's previous work are deductible from weekly benefits on a dollar-for-dollar basis. Additionally, when weekly benefits are reduced because of a pension, the maximum benefit amount is also reduced.
Maximum total benefits.- 26 times weekly benefit amount if claimant has 18 or more credit weeks and 16 times weekly benefit amount if claimant has 16 or 17 credit weeks. “Credit week” is any calendar week in the base year for which remuneration of at least $50 was paid. In addition, during certain periods of high unemployment, payment of extended benefits at weekly benefit rate.
Benefit eligibility: Requirements.-
earn $1,320 in base-year wages, including $800 in high-quarter wages and at least 20% of base-period wages paid in other than the high quarter of the claimant's base year;
serve a one-week waiting period;
be able to work and available for suitable work; and
participate in reemployment services if so required.
An otherwise eligible individual in approved training cannot be denied benefits by reason of the application of the availability for work requirement or the disqualification for refusal of suitable work without good cause. An eligible claimant will not be denied benefits by reason of the application of the availability for work requirement or the disqualification for voluntary leaving if the unemployment is due to exercising the option of accepting a layoff from an available position pursuant to a labor-management contract or an established employer plan, program or policy.
Special requirements must be met by claimants filing for benefits in consecutive benefit years without intervening work; an individual who files a claim for benefits after termination of a preceding benefit year must have worked and earned at least six times his or her weekly benefit rate subsequent to the beginning of the preceding benefit year and prior to the filing of his or her claim, or the claim will not be considered valid.
A self-employed individual is generally ineligible. However, if the self-employment was undertaken along with a claimant's regular job and was continued after the loss of the latter, the claimant is ineligible until he or she has earned at least six times his or her weekly benefit rate. Upon satisfaction of this re-employment requirement, earnings from self-employment are deductible from benefits. Certain pension payments are also deductible from benefits, as noted under “weekly benefit amount, ” above.
An individual in an instructional, research, or principal administrative capacity for any educational institution is ineligible for benefits during school vacation periods and paid sabbatical leaves based on service with such an institution.
An individual performing services in a nonprofessional capacity for an educational institution is ineligible for benefits for periods between academic years or terms if there is reasonable assurance of reemployment in the second year or term. Such an employee may claim retroactive payments of benefits for such periods if he or she is not given the opportunity to work in the second year or term.
Benefits are not payable to professional athletes for periods between two successive sport seasons if there is reasonable assurance that the individual will perform services in both seasons.
Benefits are not payable to an alien unless he or she has been lawfully admitted for permanent residence or is otherwise permanently residing in the United States under color of law.
An officer of a corporation deemed to be a self-employed person because he or she exercises a substantial degree of control over the corporation and who becomes unemployed because the corporation enters into involuntary bankruptcy proceedings is entitled to benefits provided his or her wages were mandatorily subject to the law.
Disqualifications Period.- Discharge or temporary suspension from work for willful misconduct connected with work or voluntary leaving without necessitous and compelling cause-until subsequently paid remuneration for services equal to six times weekly benefit rate. Re-employment requirement need not be met by claimant who has been on an authorized leave of absence, provided that he or she made a reasonable effort to return to work with the employer upon expiration of the leave of absence.
NOTE: An employee who admitted sending pornographic e-mails to fellow employees was not entitled to unemployment benefits and was not able to prove that the employer’s electronic communications policy was disparately applied to him. An appellate court Pennsylvania reversed a decision of the state's Unemployment Compensation Board granting benefits. In Pennsylvania, a claimant who has engaged in willful misconduct may still receive benefits if he or she can make an initial showing that: (1) the employer discharged claimant, but did not discharge other employees who engaged in similar conduct; (2) the claimant was similarly situated to the other employees who were not discharged; and (3) the employer discharged the claimant based upon an improper criterion. Here there was clear evidence that the claimant's conduct occurred with more regularity and was more egregious than that of the other employees (Geisinger Health Plan v Unemployment Compensation Board of Review , February 5, 2009).
Refusal of suitable work without good cause-duration of unemployment; except where temporary or casual work was refused, disqualification is for the period of time that the work would have been furnished. No disqualification if work is offered by the employer and claimant is not required to accept pursuant to labor-management contract or agreement or an established employer plan, program or policy. Benefits are also denied if claimant fails to accept an offer of suitable full-time work in order to pursue seasonal or part-time employment.
Labor dispute other than lockout-duration.
Illegal receipt of benefits-the week of improper payment, plus one additional week for each such week, plus a penalty period of two weeks added to the total.
Receipt of unemployment benefits under other state or federal law-period of payments.
Receipt of pension, including a governmental or other pension, retirement or retired pay, annuity, or any other similar periodic payment under a plan maintained or contributed to by a base period or chargeable employer-weekly benefit amount reduced by
100% of pro-rated weekly amount of the pension if the pension is entirely contributed to by the employer;
50% of the weekly pension if the employee contributed to the pension in any amount; and
zero (except in the case of social security or railroad retirement payments) if the services performed (or remuneration for such services) during the base period did not affect the individual's eligibility for, or increase the amount of, the pension.
WHAT THE EMPLOYER MUST DO
Pay the standard rate.- 5.4% for a zero or positive reserve account balance and 9.2% for a negative reserve account balance. Newly liable nonconstruction employers pay basic rate of 3.5%, and newly liable construction employers pay basic rate of 9.7%. A trigger mechanism in the law provides for employee contribution rates, additional employer rates, and employer surcharges to be determined for each year, according to the balance in the fund and the average of benefit costs for the three immediately preceding fiscal years.
For calendar year 2009, the following unemployment compensation solvency measures are in effect: (1) the additional employer contribution is 0.25%; (2) the surcharge tax is positive 5.8%; and (3) the employee tax is 0.06% ($0.60 per $1,000 gross wages). The state adjustment factor is 1.5% in 2009.
Employee tax.- The employee tax is:
zero if the trigger percentage (see below) is at least 125%, but less than 150%;
.02% if the trigger percentage is at least 110%, but less than 125%;
0.03% if the trigger percentage is at least 95%, but less than 110%;
0.06% if the trigger percentage is at least 75%, but less than 95%; and
0.08% if the trigger percentage is less than 75%.
There is a 0.06% employee tax in 2009. First in 1992 and each fifth year thereafter, employee tax rates may be redetermined so that the unrounded rates yield contribution increases equal to certain dollar amounts specified in the law. Such redetermined rate will go into effect the next calendar year and will remain in effect for five years, before being redetermined.
Each employer is responsible for withholding employee contributions from the wages of its employees at the time such wages are paid and must report and transmit such deductions to the Department for deposit into the Fund. Any employer who fails to withhold or transmit employee contributions is subject to penalty.
Employer rates.- Employers with the required amount of employment experience may have the “standard rate” varied, up to a maximum of 9.2% or a minimum of 0.3%. However, no employer's rate for a calendar year may be other than 3.0% plus its assigned contribution rate unless all contributions, interest and penalties due on wages up to the end of the second calendar quarter of the preceding year are paid by September 30 of the preceding year. An employer other than a construction contractor (see below) who becomes newly liable for contributions pays at a rate of 3.5% until it is eligible for an experience rate. Rates may be increased by additional taxes or surcharges -see below.
An employer is placed in one of three groups on the basis of his or her employment experience. It must have paid contributions for at least one or more quarters in the two 12-month periods that precedes, for placement in group 1, two 12-month periods that include at least one quarter in each 12-month period for which contributions were paid; for group 2, three such 12-month periods; for group 3, four such 12-month periods. For all groups, the end of the 12-month period or periods is June 30 preceding year for which rate is being computed. This date is the “computation date.”
The employer's position within the group is based on the ratio of the balance in its reserve account to its average taxable wages. The employer's position in the group determines its reserve ratio factor. This ranges from zero to 2.7%. The employer's reserve ratio factor is added to two other factors, the benefit ratio factor and the state adjustment factor. The benefit ratio factor may not be less than zero or more than 5.0% and is computed by a formula: average annual benefits over average annual payroll times 100, rounded to nearest 10th of a percent. ( “Annual benefits”: total benefits charged to the employer's account in the 12-month period ending on the computation date. “Average annual benefits”: for groups 2 and 3, this is the average of the employer's last three annual benefits; for group 1, it is the average of the employer's last two annual benefits.)
A group 1 employer will be assigned a reserve ratio factor equal to
of the factor otherwise determined. A group 2 employer will be assigned a reserve ratio factor equal to two-thirds of the factor otherwise assigned.
“State adjustment factor” is the same for all rated employers. It is based on a ratio between
the aggregate of various amounts, such as benefits not charged to employer's accounts, benefits charged to inactive or terminated accounts, less certain other amounts such as interest earned on the fund, and
the wages paid by employers during the past 12-month period.
If the state adjustment factor exceeds 1.5%, the excess is added to the adjustment factor for the following year or years. For 2009, the state adjustment factor is 1.5%.
If the amounts charged to an employer's account exceed amounts credited by more than 20% of its average annual payroll, it may elect to have its account balance adjusted to a negative balance equal to 20% of its average annual payroll. After an employer's account has been so adjusted, it will pay the maximum basic rate applicable, plus any applicable surcharge or rate increase.
If the trigger percentage is at least 95%, there will be no additional contribution. If the trigger percentage is at least 75%, but less than 95%, the additional contribution will be 0.255%; if the trigger percentage is at least 50%, but less than 75%, the additional contribution will be 0.40%; and if the trigger percentage is less than 50%, the additional contribution will be 0.65%. There is a 0.25% additional tax for 2009. First in 1992 and each fifth year thereafter, the additional contribution rate will be redetermined so that the unrounded rates yield contribution increases equal to certain dollar amounts specified in the law. Such redetermined rate will go into effect for the next calendar year and will remain in effect for five years, before being redetermined.
All employers other than reimbursing employers will be required to pay a surcharge, which will depend on the trigger percentage.
If the trigger percentage is at least 150%, the surcharge rate will be a negative 1.1%.
If the trigger percentage is at least 125%, but less than 150%, there will be no surcharge.
If the trigger percentage is at least 110%, but less than 125%, the surcharge will be 2.9%.
If the trigger percentage is less than 110%, the surcharge will be 5.8%.
The surcharge for 2009 is 5.8%. First in 1992 and each fifth year thereafter, the surcharge may be redetermined so that the unrounded rates yield contribution increases (or decreases) equal to certain dollar amounts specified in the law. Such redetermined surcharge will go into effect for the next calendar year and will remain in effect for five years, before being redetermined.
For 2009, total rates for experience-rated, nondelinquent employers range from 1.8370% to 9.9836%. Rates for delinquent employers range from 5.0110% to 13.1576% in 2009. The employer surcharge tax is a positive 5.8% for 2009. The additional employer tax for 2009 is 0.25%, and the employee tax is 0.06% ($0.60 per $1,000 gross wages) for 2009. The state adjustment factor is 1.5% for 2009. New nonconstruction employers pay 3.7030%, and new construction employers pay 10.2626% in 2008.
All contributing employers except new employers are required to pay an advance interest tax to pay accrued interest on federal advances to the state if they exist. No advance interest tax is required for a year following any year in which the amount of interest-bearing advances has been reduced to zero, but a tax will be required and reimposed for a year following any year in which an interest-bearing advance remains outstanding on October 1 and there are not sufficient funds to pay the interest due in that year.
SUTA dumping.- The Department may not transfer the whole or appropriate part of a preceding employer’s experience record and reserve account balance if the department determines that the successor-in-interest acquired all or part of the preceding employer’s organization, trade, business or workforce solely or primarily to obtain a lower rate of contribution.
Voluntary payments.- Permitted if paid not later than 30 days following mailing of notice of contribution rate, unless extended for good cause, but, in any event, within 120 days of start of calendar year.
DEADLINES
Tax and wage.- Employer's Report for Unemployment Compensation, Form UC-2 and Employer's Quarterly Report of Wages Paid to Each Employee, Form UC-2A, are due quarterly on or before last day of following month. If a due date falls on Saturday, Sunday or legal holiday, the report will be due the next business day. Filing by magnetic media or via the Internet is required for employers with 250 or more wage entries.
ENFORCEMENT
The Pennsylvania Unemployment Compensation Law is administered by the Department of Labor and Industry, Bureau of Employment Security.
Where an employer, including the state and its political subdivisions, after notice by the Department, fails, neglects, or refuses to pay contributions due, or the interest or penalties due thereon, the amount due may be collected by civil action in the name of the Commonwealth. Judgments in civil action to collect delinquent contributions include interest and penalties.
If an employer fails to timely file any report necessary to enable the Department to determine the amount of any contribution owed by the employer, the Department has the authority to make its own estimate of the amount of contributions and interest due and to make an assessment on this basis. Within 15 days after the assessment is made, the employer will be notified by registered mail of the amount of the assessment. The employer, if dissatisfied, may within 15 days petition for a reassessment (although the Department's determination of the state adjustment factor may not be questioned). The petition must be made under oath and must set forth specifically and in detail the grounds and reasons on which it is claimed the assessment is erroneous. A hearing (or hearings) on the petition will be held by the Director, under procedures established by the rules and regulations, with due notice given to the petitioner.
If the employer fails to petition for reassessment, or, having petitioned, fails to appear and be heard, or fails to appeal, the assessment or reassessment becomes final. The contributions and interest become forthwith due and payable as assessed, and no defense that might have been determined by the Department or the court will be available to the employer in any suit or proceeding brought by the Commonwealth in the name of the fund for the recovery of the contribution based on the assessment or reassessment.
Generally, no legal action for the collection of contributions, interest, and penalties may be instituted after the expiration of four years from the end of the calendar year in which the wages were paid with respect to which liability for the payment of the contributions, etc., was based. However, this rule does not apply if, prior to the expiration of the four-year period and with respect thereto, (1) an assessment proceeding was instituted under Sec. 304 as described in the preceding paragraphs, or (2) an action was instituted under Sec. 309 for failure, refusal, or neglect to pay contributions, or (3) a lien was entered under Sec. 308.1. This limitation on enforcement of payment of contributions, interest, and penalties does not apply if the employer has attempted to avoid or reduce liability for the payment of contributions by willful failure or refusal to file a report with the Department or to include in any report all wages he has paid, or otherwise.
WHO TO CONTACT
The Pennsylvania Unemployment Compensation Law is administered by the Department of Labor and Industry, Bureau of Employment Security, Seventh and Forster Sts., Harrisburg, Pennsylvania 17112. Telephone (717) 787-6868.
RECORDKEEPING
Each employer, whether or not liable for contributions under the Law, must keep accurate employment records containing such information as prescribed by the Department's rules and regulations. Clear, accurate, and complete employment and payroll records, include each worker's:
Social security number,
Full name,
Wage rate (hourly, daily, or piece rate, or weekly, monthly, or annual salary),
Total remuneration paid for each pay period by type of payment (cash, and cash value of payments in kind),
Traveling and other business expenses actually incurred and accounted for, and the dates these expenses were incurred and paid by the employer,
Place of employment,
Full-time scheduled hours,
Daily attendance record, showing the dates on which the worker actually worked, and time lost due to reasons other than lack of work, and
If separated, the date and reasons for separation.
The employer's records must be open for inspection by the Department and its agents at any reasonable time and as often as may be deemed necessary. All employment and payroll records and supporting evidence, as well as all other business records such as cash books, journals, ledgers, and corporate minutes, must be retained, either at the place of employment or at an established central record-keeping office, and further require that they be in such condition that the information required can be readily obtained by representatives of the Bureau.
The length of time the records must be kept is four years after contributions relating to the records have been paid, except that daily attendance records need not be kept for more than two years.
The Department has the authority to require from employers such reports as it deems necessary and to require that the reports be sworn to by the employer.
POSTING
Each employer is required to post, in a conspicuous place or places in its establishment (or establishments), printed notices or posters informing employees of their potential rights to benefits under the Law and providing general information as to what the employee must do, and where to go, in order to obtain benefits. The notices are obtainable, without cost, from the Bureau. See ¶39-9900 .
PENALTIES
Interest and penalties.- Contributions unpaid on the due date bear interest at the same rate assessed annually on all delinquent tax monies due the Commonwealth, as determined each year by the Pennsylvania Secretary of Revenue.
In case an extension of time is granted for the payment of contributions, interest at the rate of one-half of one per cent per month or fraction of a month from the due date until the expiration of the period of extension must be paid on or before the expiration of the period of extension.
Delinquent interest and penalties due on any contributions may be compromised if the Department is satisfied
that the employer is unable to make full payment or that it would be inequitable to require full payment of delinquent interest, and
that the employer has acted in good faith.
Where an employer has been adjudged a bankrupt, or where a receiver has been appointed for an employer, or where an executor or administrator has been designated for a deceased employer, the secretary may compromise the principal of any delinquent contribution as well as interest and penalties thereon. A compromise of an amount in excess of $1,000 requires the approval of the Attorney General, however.
The application for an agreement to compromise contributions, interest, or penalties is made on Form UC-168, “Application for Agreement to Compromise.” The application must be properly executed under oath by the employee or his duly authorized representative and must include any additional information the Bureau may require. All contributions, interest, or penalties other than those with respect to which application for compromise is being made, and all legal costs incurred by the Bureau, must be paid in full before the Bureau will give consideration to the application. The amount offered in compromise must, unless the Bureau waives this requirement, accompany each application.
A fine of not less than $50 or more than $500 is prescribed upon conviction in a summary proceeding of various offenses under the Law, and in default of payment the offending individual may be sentenced to imprisonment for up to 30 days. The penalty applies to any employer, whether or not liable for the payment of contributions under the law, or any officer or agent of the employer, or any other person, who knowingly makes a false statement or representation, or who knowingly fails to disclose a material fact to prevent or reduce the payment of benefits to any entitled employee, or to avoid remaining or becoming subject to the law, or to avoid or reduce any contribution or other payment required from an employer under the law, or who willfully fails or refuses to permit the inspection or copying of records as required by the law. Each false statement or representation or failure to disclose a material fact, and each day of failure or refusal, constitutes a separate offense.
Another penalty provision provides that any person who willfully violates any provision of the law, or any rule or regulation, shall on conviction pay a fine of from $20 to $200 dollars. Imprisonment for up to 30 days is prescribed in the event of default of payment of the fine and costs, and each day the violation continues is considered a separate offense.
Although no legal action for the collection of contributions, interest, and penalties may ordinarily be instituted after the expiration of four years from the end of the calendar year in which the wages were paid, this is not true if the employer has willfully failed or refused to file a report with the Department or to include in any report all the wages it has paid or otherwise has attempted to avoid or reduce liability for the payment of contributions.
Any employer who pays the Department with a check that is dishonored will be charged a fee equal to 100% of the face value of the check, but not more than $100 or less than $10.
Liens.- Amounts due and payable under the law by an employer constitute a lien upon the employer's franchises and property, both real and personal, including after-acquired property. The lien attaches from the date it is recorded. It has priority from such date and must be fully paid and satisfied out of the proceeds of any judicial sale of property subject to the lien before any other obligation, judgment, claim, lien or estate to which the property may become subject later, with the exception of costs of the sale and the writ upon which the sale was made, real estate taxes, and municipal claims. Such a lien is subordinate, however, to mortgages and other liens existing and recorded at an earlier date. In the case of such a lien, it is lawful for a writ of execution to be directly issued without the issuance and prosecution to judgment of a writ of scire facias, provided notice of the filing and the effect of the lien is sent by registered or certified mail to the employer at its last known post office address within 10 days before the issuance of the execution. Such liens continue for five years from the date of entry and may be revived and continued.
However, a lien shall not be effective upon any stock of goods, wares or merchandise regularly sold or leased in the ordinary course of business unless and until a writ of execution is issued and levy made upon such stock of goods, wares or merchandise.
Property subject to a lien or judgment entered under the provisions of the law may be acquired by the Department at a judicial sale of such property if necessary to protect the Department's interest. Costs of acquiring such property, maintenance, preservation, and disposal thereof constitute administrative expenses to be paid out of the administration fund. The law also provides the manner in which the Department may dispose of property so acquired and how the proceeds therefrom are to be distributed. When a lien or judgment remains unpaid 60 days after notice in writing of entry thereof has been sent the employer, the employer may be enjoined from continuing in business in the state or employing persons therein upon complaint of the Secretary. Such injunction shall remain in effect until
the amounts owed the Department are paid or
the employer has furnished bond conditioned upon the payment of such delinquencies in such amount and containing such terms as may be determined by the Court or
the employer has entered into a plan for the liquidation of such delinquencies as the Court may approve, but the injunction may be reinstated if the employer fails to comply with the terms of the plan.
Bankruptcy.- In the event of any distribution of an employer's assets pursuant to an order of any court under the laws of Pennsylvania, including any receivership, assignment for the benefit of creditors, adjudicated insolvency, composition, or similar proceeding, priority is given to contributions and interest above all other claims except taxes, workmen's compensation claims, and claims for wages of not more than $250 per claimant earned within six months of the beginning of the proceedings. In the event of an employer's adjudication in bankruptcy, judicially confirmed extension proposal, or composition under the Federal Bankruptcy Act of 1898, contributions then or thereafter due take such priority as is granted to taxes due to a state under the Federal Bankruptcy Act.
<p>Bankruptcy.— In the event of any distribution of an employer's assets pursuant to an order of any court under the laws of Pennsylvania, including any receiversh</p>
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