Unemployment Insurance Law Summaries
Utah, Unemployment Insurance Law Summaries
The Utah unemployment insurance law is located in the Utah Code Annotated 1987-1988, Title 35, Chapter 4, Secs. 35-4-101 to 35-4-508, as amended; and in Utah Administrative Code, Rules R562-2, R562-3a to R562-3c, R562-3f, R562-4a to R562-4c, R562-4e to R562-4g, R562-5a, R562-5b, R562-5b2, R562-5c to R562-5e, R562-5g to R562-5i, R562-5k, R562-6b to R562-6e, R562-7a, R562-7c, R562-7f, R562-8, R562-10b, R562-10d, R562-10e, R562-11g, R562-17a, R562-18b, R562-19a, R562-21a, R562-22, R562-22j, R562-22j-6, R562-22m, R562-22p, R562-35b, R562-35f, R562-45, R562-75, and R562-85. The full text of the law is available beginning at Unemployment Insurance Reports UI-UT ¶4101 .
DEFINITIONS
“Employer:” An individual or employing unit that (1) employs one or more persons for some part of a day during a calendar year or (2) is required by FUTA to be an employer under the Utah law in order to obtain approval of the Utah law for credit against tax imposed by FUTA.
If an individual or entity contracts to supply an employee to perform services for a customer or client, and is a leasing employer or temporary services employer, the individual or entity is the employer of the employee performing the services. If the individual or entity is not a leasing employer or a temporary services employer, it pays the wages as the agent of the employer.
“Employment:” Any service, including service in interstate commerce, and service as an officer of a corporation performed for wages or under any contract of hire, with exceptions listed below.
Service performed by an individual for wages or under any contract of hire, written or oral, express or implied, is employment unless the individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the contract of hire and the individual has been and will continue to be free from control or direction over the means of performance of those services, both under the individual's contract of hire and in fact.
Generally, employment subject to the FUTA is automatically subject to the Utah law.
“Wages:” All remuneration for personal services, including commissions, bonuses and cash value of all remuneration in any medium other than cash. Gratuities or tips customarily received in course of work from persons other than employer, and accounted for to the employer (including tips reported to the employer for federal social security purposes), are treated as wages received from employer. Term “wages ” does not include the following:
Remuneration over an annually determined amount that is equal to 75% of the average fiscal year wage (rounded to the next higher multiple of $100) of covered workers during the fiscal year prior to the calendar year for which the wage base is being determined. For 2006, the wage base is $24,000, and for 2007, the wage base is $25,400. Remuneration paid by employer's predecessor may be included. Provision is made for counting remuneration paid for employment in another state. Amount will be increased if federal taxable wage base is increased to an amount over Utah's limit.
Other exclusions from wages are listed below.
COVERAGE
Generally, employment subject to the FUTA is automatically subject to the Utah law. Covered employment means any service, including service in interstate commerce, and service as an officer of a corporation performed for wages or under any contract of hire, with exceptions listed below.
Agricultural and domestic employers.- Services performed in agricultural labor are covered if performed for an employer who employs 10 or more workers in such services in 20 different weeks in the current or preceding calendar year or pays $20,000 or more for such services in any quarter of the current or preceding calendar year. When agricultural labor is provided by a crew leader, the employing unit for which the service is performed is the employer 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 employer who paid $1,000 or more in any quarter of the current or preceding calendar year for such service.
Government and nonprofit employers.- Tax-exempt nonprofit organizations employing four or more individuals in each of 20 weeks in either the current or preceding calendar year are covered. Services performed for the state are covered, as are services for any county, city, town or political subdivision. Services performed for the federal government or a foreign government are excluded.
Nonprofit organizations, tribal units, and governmental entities have the option of financing benefits by either the regular contributions or the reimbursement method. The state continues to use the reimbursement method, although any county, city, town, school district or any political subdivision may elect to pay contributions or to make payments in lieu of contributions.
Employers using reimbursement financing choose one of the following methods:
payments equal to full amount of regular benefits and 50% (100% for governmental entities) of extended benefits paid to claimants, or
a variable percentage based on total payroll.
Under (b), employers are subject to a year-end adjustment to reflect actual benefit costs. The commission may require nonprofit organizations electing the reimbursement method to deposit money.
EXCEPTIONS
Wages.- Term “wages” does not include the following (Sec. 35-4-208):
Remuneration over an annually determined amount that is equal to 75% of the average fiscal year wage (rounded to the next higher multiple of $100) of covered workers during the fiscal year prior to the calendar year for which the wage base is being determined. For 2009, the wage base is $27,800. Remuneration paid by employer's predecessor may be included. Provision is made for counting remuneration paid for employment in another state. Amount will be increased if federal taxable wage base is increased to an amount over Utah's limit.
Payments by employer to, or on behalf of, individuals in its employ under plan or system established on account of sickness or accident disability (but only if such payments are made under a workers' compensation law), medical and hospitalization expenses, or death.
Payment of employee's FICA tax without deduction from wages.
Dismissal payments that employer is not legally required to make.
Any payment made to or on behalf of an employee or his or her beneficiary under a cafeteria plan within the meaning of IRC Sec. 125.
Payments on account of sickness or accident disability, or medical or hospitalization expenses in connection with sickness or accident disability, made by an employer to or on behalf of an employee after the expiration of six calendar months following the last calendar month in which the employee worked for the employer.
Employment.- The term “employment” does not include the following:
Casual labor not in course of employing unit's trade or business.
Insurance agents on commission basis.
Maritime employees, except service by an officer or crew member of an American vessel is covered if management and control of such vessel are within Utah.
Metal mining lessees under lease agreement unless lease agreement or practice in actual operation is such as would constitute lessees employees of lessor at common law.
Newspaper carriers.
Organizations exempt from income tax, with respect to service performed in calendar quarter if remuneration is less than $50.
Outside salespersons paid by commission only if services are done outside the place of business of the enterprise for which the services are performed, unless the service is “employment” under common law; nevertheless, services performed by certain agent-drivers or commission-drivers, and traveling or city salespersons are covered.
Railroad employees covered by Railroad Unemployment Insurance Act.
Real estate salespersons and agents on commission basis.
Registered or practical nurse performing services in patient's home if substantially all of the compensation is from health insurance proceeds and no compensation or fee is paid to any agency or company as a business furnishing nursing services.
Relatives, i.e., service performed by individual in employ of son, daughter, or spouse, or by child under 21 in employ of parent.
Service for school, college or university performed by student in regular attendance, or spouse of that student if spouse's employment is under program of assistance to the student.
Service by student enrolled at a nonprofit or public educational institution in full-time work-study program. Exemption not applicable if service performed under program established for an employer or group of employers.
Service for a hospital by a patient of the hospital.
Service as a licensed securities agent or salesperson (registered representative) if performed for remuneration solely by way of commission.
Service performed by a telephone survey conductor or pollster if the individual does not perform the service on the principal's premises and is paid for the services solely on a piece-rate or commission basis.
Government and nonprofit employers.- Tax-exempt nonprofit organizations employing four or more individuals in each of 20 weeks in either the current or preceding calendar year are covered. Services performed for the state are covered, as are services for any county, city, town or political subdivision. Services performed for the federal government or a foreign government are excluded.
Services for nonprofit organizations and the state do not include the following:
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 program financed by federal agency, or an agency of a state or political subdivision.
Elected officials.
Members of boards, councils or commissions when such members are paid on a per diem basis.
Members of a legislative body or the judiciary.
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 in certain major nontenured policymaking or advisory positions.
Inmate of a custodial or penal institution.
PROCEDURES
Base period.- First four of the last five completed quarters preceding first day of benefit year.
Benefit year.- 52-week period beginning with the first week for which claim is filed and claimant has insured status.
Weekly benefit amount.-
(disregarding any fraction of $1) of highest quarterly base-period wages, but not more than 62.5% of the insured average fiscal year weekly wage during the preceding fiscal year for claims filed on or after July 4, 2004. (The maximum for benefits filed on or after July 1, 2001, is 65% of the insured average fiscal year weekly wage.) Wages in excess of 30% of the weekly benefit amount are deducted from benefit amount. The maximum weekly benefit amount for claims established in the year 2009 is $444.
Weekly benefit amount is reduced by 100% of any governmental, social security or other pension, retirement or disability retirement pay made under a plan maintained or contributed to by a base period employer if claimant receives such benefit by reason of past performance of personal services.
Maximum total benefits.- 10 to 26 times weekly benefit amount, determined by multiplying claimant's total base period wages by 27% and dividing the result by his or her weekly benefit amount. Fractions of $1 are disregarded. In addition, during periods of high unemployment, payment of extended benefits at claimant's regular weekly benefit amount.
Benefit eligibility.- Claimant eligible if-
able and available for work each and every week with respect to which benefits are claimed, and has acted in good faith in an active effort to secure employment;
serves one-week waiting period;
had total base period wages equal to at least 1
times his or her high-quarter wages or has worked at least 20 weeks in insured work during his or her base period and earned wages of at least 5% of the monetary base period wage requirement (8% of the desired average fiscal year wage for the preceding fiscal year) each week, provided that total base period wages were not less than the monetary base period wage requirement.
To qualify for benefits in a successive benefit year, an individual must have earned at least six times his or her weekly benefit amount in the immediately preceding benefit year. If claimant receives workers' compensation, his or her unemployment benefit rights are preserved if his or her period of sickness or injury is one continuous period, if the week for which benefits are claimed is within 36 months following the onset of the sickness or injury, and if claim for benefits is filed within 90 days after the period of sickness or injury.
Disqualifications Period.- Voluntary leaving without good cause or failure without good cause to apply for or accept suitable work-for the week of the leaving or refusal and until claimant has performed services in bona fide covered employment and earned wages equal to at least six times his or her weekly benefit amount. No disqualification if claimant leaves or refuses work under circumstances of such nature that it would be contrary to equity and good conscience to impose disqualification. Note that an individual who leaves work voluntarily to accompany, follow or join his or her spouse to or in a new locality does so without good cause.
Discharge for just cause due to misconduct connected with work for the week of the discharge and until the claimant has earned wages equal to at least six times his or her weekly benefit amount in bona fide covered employment.
Discharge for dishonesty constituting a crime or any felony or class A misdemeanor in connection with work-52 weeks and wage credits deleted from claimant's base period and unavailable for this or any subsequent claim.
Labor dispute-duration of dispute, unless employer fails to conform to labor law. Worker unemployed due to strike who has obtained interim employment is eligible for benefits if, in interim employment, worker earned at least $700 in his or her base period and received wages for not less than 19 calendar weeks in each of which he or she earned at least $20.
Misrepresentation to obtain benefits-for week of misrepresentation, for an additional 13 weeks for the first week, for six additional weeks for each week thereafter, not to exceed 49 weeks. Claimant must repay amount of benefits actually received and, as a civil penalty, an amount equal to the benefits he or she received by direct reason of his or her misrepresentation.
Receipt of unemployment benefits under another law -weeks in which benefits received.
Attending school, or on school vacations-weeks of attendance or vacation, unless most of base-period employment was for services performed while attending school. Notwithstanding availability requirement (see above) and disqualification for failure to apply for or accept suitable work, individual in approved training, including a part-time training course, is eligible for benefits.
Receipt of wages in lieu of notice, separation pay or vacation pay-week for which payments received. Benefits reduced if they exceed amount of payments.
Instructors, researchers and principal administrators of any educational institution are disqualified during school vacation periods or paid sabbatical leaves based on service with such an institution.
Benefits are not payable to nonprofessional employees of an educational institution during periods between successive academic years or terms if there is reasonable assurance of reemployment in the second year or term. Retroactive payment of benefits may be claimed if, after reasonable assurance of reemployment is given, there is no opportunity to perform services in the second year or term.
A between-term disqualification also applies to individuals performing services in an educational institution while in the employ of an educational service agency.
Benefits are not payable to a professional athlete during 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.
WHAT THE EMPLOYER MUST DO
Pay the standard rate.- Maximum overall contribution rate of 9.0%. New employer pays an amount equal to the average benefit cost rate experienced by employers in the major industry to which it belongs, but not less than 1.1% or more than 9.0% (the benefit cost rate, which may not be less than 1.0%, will be used to determine the overall contribution rate for the new employer, which may not be more than 9.0%). If the major industrial classification assigned to a new employer is an industry for which there is no benefit cost rate because the industry has not operated in the state or has not been covered under the law, the employer's basic rate will be 5.4%, which rate will be used to determine the overall contribution rate. For 2009, most new employers pay 0.12%, although rates for some industries are higher.
The overall contribution rate is the basic contribution rate multiplied by the reserve factor and calculated to four decimal places, plus the social contribution rate calculated to three decimal places. The maximum overall contribution rate is 9.0% and may not be less than 1.1% for a new employer. No employee tax.
Experience rates.- Employer is qualified for experience-rating for a calendar year if it was subject to the law in each quarter of the prior fiscal year beginning immediately preceding the computation date (January 1) and has paid all contributions due. A delinquent employer will pay its overall contribution rate, which may not exceed 9.0%, plus a 1.0% surcharge.
An employer who begins to operate in Utah after having operated in another state and who:
is regularly engaged as a contractor in the construction, improvement, or repair of buildings, roads, or other structures on land;
is generally regarded as being a construction contractor or a subcontractor specializing in some aspect of construction; or
is required to have a contractor's license,
will be assigned the maximum overall contribution rate until the employer acquires sufficient experience to be considered a qualified employer.
An employer's basic tax rate is its benefit ratio, which is determined by dividing the total benefit costs charged back to it during the immediately preceding one to four fiscal years, depending on how much data is available, by the total taxable wages paid by the employer for the same period, calculated to four decimal places, disregarding any further fraction. An employer's overall rate is its basic tax rate multiplied by the reserve factor, if any, plus the social charge tax rate. The overall rate will be rounded up to the next higher multiple of 0.1%, but may not be more than 9.0%.
The reserve factor is set each January 1, based on the “adequate reserve,” which is defined as between 17 and 19 months of benefits at the average of the five highest benefit cost rates in the last 25 years. The reserve factor will be 1.0000 if the actual reserve fund balance as of the preceding June 30 is determined to be an adequate reserve. The reserve factor will be set between 0.5000 and 1.0000 if the actual reserve fund balance is greater than the adequate reserve, and between 1.0000 and 1.5000 if the actual reserve fund balance is less than the adequate reserve. If the actual reserve as of June 30 is insolvent or has a negative balance or if there are outstanding federal loans, the reserve factor will be 2.000.
The social contribution rate is set at 0.0010 for any rate year in which the reserve factor is equal to or less than 1.0000. If the reserve factor is greater than 1.0000, the social contribution rate is calculated by dividing all social costs for the preceding four fiscal years by the total taxable wages of all subject employers for the same period. The social contribution rate will be added to each employer's basic tax rate after this rate has been adjusted by the reserve factor.
For calendar year 2009, there is a reserve factor of 1.00 and the social cost tax rate is 0.20%, so that total rates for experience-rated employers (not including the 1.0% additional surcharge payable by delinquent employers) range from 0.2% to 9.2% for 2009. Most new employers will pay 0.12%, for 2009 although rates for some industries may be higher.
DEADLINES
Tax and wage.- Form 3, Employer's Contribution Report, is due quarterly on or before April 30, July 31, October 31, and January 31, for the preceding calendar quarter. Form 3H, Employer's Quarterly Wage List, must be completed and returned with the contribution report. Magnetic media, diskette, and Internet filing are available.
ENFORCEMENT
The Utah Employment Security Act is administered by the Utah Industrial Commission through the Department of Employment Security.
If, after due notice, any employer defaults in any payment of contributions, interest, or penalties thereon, the amount due shall be collectible by civil action in the name of the commission, and the employer adjudged in default shall pay the costs of the action.
Civil actions brought to collect contributions, interest or penalties from an employer shall be heard by the court at the earliest possible date and shall be entitled to preference upon the calendar of the court over all other civil actions except petitions for judicial review under this chapter and cases arising under the workers' compensation law of this state.
Records.- The Commission may require from any employing unit any sworn or unsworn reports with respect to persons employed by such employing unit which the Commission deems necessary for the effective administration of the law (Sec. 35-4-312).
Information obtained under Utah's unemployment insurance law from any individual may not be published or be open to public inspection in any manner revealing the individual's or employing unit's identity nor may it be used in any court or admitted into evidence in an action or proceeding. However, the information may be used in an unemployment insurance action or proceeding, in an action brought by the commission to enforce Utah's workers' compensation provisions, or where it is obtained under court order (Sec. 35-4-312).
On the other hand, the information must be disclosed boa party to a hearing before an administrative law judge or the commission or when an employer requests, in writing, information concerning claims for benefits with respect to the employer's former employees (Sec. 35-4-312).
Information obtained by the commission from the employer's records or reports may be disclosed to commission employees in the performance of their duties in administering the unemployment insurance law or for the purpose of carrying out programs administered by the commission for the protection of workers in the workplace; to an employee of the governor's office and other state agencies as necessary for economic development policy analysis and formulation; to an employee of a governmental agency specifically authorized by federal or state law to receive the information; to an employee of a governmental agency to the extent the information will aid in the detection of duplicate or fraudulent claims, disclosure of a significant risk to public safety or to aid in a felony criminal investigation; to an employee of the State Tax Commission or the Internal Revenue Service for audit verification or compliance purposes; to an employee of an educational institution or other governmental entity providing job training to individuals for the purpose of coordinating services and evaluating the effectiveness of the training; or to an employee of the Department of Community and Economic Development for publication of employers' names, addresses, telephone numbers, number of employees by range, Standard Industrial Code and type of ownership in the Directory of Business and Industry (Sec. 35-4-312).
Disclosure of private information, except to agencies authorized to receive the information or law enforcement agencies, may be made only if the commission determines that the disclosure will not have a negative effect on the willingness of employers to report wage and employment information or on the willingness of individuals to file claims for unemployment benefits and the agency enters into a written agreement with the commission (Sec. 35-4-312).
Employees of the agencies that receive private information from the commission are subject to the same privacy and confidentiality requirements and the same penalties for misuse or improper disclosure as the commission employees. Use of private information for an purpose other than that stated in the law is unauthorized (Sec. 35-4-312).
WHO TO CONTACT
The Utah Employment Security Act is administered by the Utah Department of Workforce Services, 140 East 300 South, P.O. Box 45249, Salt Lake City, Utah 84145-0249. Telephone (801) 536-7400.
RECORDKEEPING
Each employing unit must keep true and accurate work records that must contain information prescribed by the Industrial Commission. The work records must be open to inspection and duplication by the commission or its authorized representative (Sec. 35-4-312).
Records must be preserved by each employing unit for a period of at least three calendar years. The records must be available in Utah during that period of time (Sec. 35-4-312).
POSTING
Employers are required to post and maintain in places readily accessible to individuals in their service printed statements concerning benefit rights, claims for benefits and other matters relating to the administration of the Act. See ¶46-9900 .
PENALTIES
Interest and penalties. If contributions are not paid upon due date, they bear interest at the rate of 1% per month from such due date until payment plus accrued interest is received by the Commission.
Contributions unpaid on the date on which they are due and payable, as prescribed by the commission, will bear interest at the rate of 1% per month from and after that date until payment plus accrued interest is received by the commission.
Contribution reports not made and filed by the date on which they are due as prescribed by the commission are subject to a penalty to be assessed and collected in the same manner as contributions due under this section equal to 5% of the contribution due if the failure to file on time was not more than 15 days, with an additional 5% for each additional 15 days or fraction thereof during which the failure continued, but not to exceed 25% in the aggregate and not less than $25 with respect to each reporting period.
If a report is filed after such time and it is shown to the satisfaction of the commission or its authorized representative that the failure to file was due to a reasonable cause and not to willful neglect, no such addition shall be made to the contribution.
If contributions are unpaid after ten days from the date of the mailing or personal delivery by the commission or its authorized representative, of a written demand for payment, there shall attach to the contribution, to be assessed and collected in the same manner as contributions due under this section, a penalty equal to 5% of the contribution due. No such penalty shall attach if within 10 days after the mailing or personal delivery, arrangements for payment have been made with the commission, or its authorized representative, and payment is made in accordance with those arrangements.
Benefit overpayments, contributions, interest, and penalties, uncollected three years after they become due, may be charged as uncollectable and removed from the records of the commission if no assets belonging to the liable person and subject to attachment can be found, and in the opinion of the commission there is no likelihood of collection at a future date.
If an employer fails to file a report when prescribed by the commission for the purpose of determining the amount of the employer's contribution due under this chapter, or if the report when filed is incorrect or insufficient or is not satisfactory to the commission, the commission or its authorized representative may determine the amount of wages paid for employment during the period or periods with respect to which the reports were or should have been made and the amount of contribution due from the employer on the basis of such information as it may be able to obtain.
The commission shall give written notice of the determination to the employer. The determination is considered correct unless the employer shall, within ten days after mailing or personal delivery of notice of the determination, apply to the commission for a review of the determination, or unless the commission or its authorized representative of its own motion shall review the determination.
The amount of contribution so determined shall be subject to penalties and interest.
An employer's successor, successors, or assigns, if any, shall be required to withhold sufficient of the purchase money to cover the amount of the contributions and interest or penalties due and payable until such time as the former owner shall produce a receipt from the commission showing that they have been paid or a certificate stating that no amount is due. If the purchaser of a business or stock of goods fails to withhold sufficient purchase money as above provided, the purchaser shall be personally liable for the payment of the amount of the contributions required to be paid by the former owner, interest and penalties accrued and unpaid by the former owner, owners, or assignors.
In the event that any employer is delinquent in the payment of any contribution, the commission may give notice of the amount of the delinquency by registered mail to all persons having in their possession or under their control, any credits or other personal property belonging to the employer, or owing any debts to the employer at the time of the receipt by them of the notice and thereafter any persons notified shall neither transfer nor make any other disposition of the credits, other personal property, or debts until the commission has consented to a transfer or disposition, or until 20 days after the receipt of the notice.
Bankruptcy.- In the event of any distribution of an employer's assets under an order of any court under the laws of this state, including any receivership, assignment for benefits of creditors, adjudicated insolvency, composition, or similar proceedings, contributions then or thereafter due shall be paid in full prior to all other claims except taxes and claims for wages of not more than $400 to each claimant, earned within five months of the commencement of the proceeding.
If an employer commences a proceeding in the Federal Bankruptcy Court under any chapter of the Bankruptcy Reform Act of 1978, 11 U.S.C. 101 et seq., as amended, contributions, interest, and penalties then or thereafter due shall be entitled to the priority provided for taxes, interest, and penalties in the Bankruptcy Reform Act.
Liens.- In addition and as an alternative to any other remedy provided and provided that no appeal or other proceeding for review is then pending and the time for taking it has expired, the commission or its authorized representative may issue a warrant in duplicate, under its official seal, directed to the sheriff of any county of the state, commanding the sheriff to levy upon and sell the real and personal property of a delinquent employer found within his county for the payment of the contributions due thereon, with the added penalties, interest, and costs, and to return the warrant to the commission and pay into the fund the money collected by virtue thereof by a time to be therein specified, not more than 60 days from the date of the warrant. The amount of the warrant shall have the force and effect of an execution against all personal property of the delinquent employer and shall also become a lien upon the real property of the delinquent employer in the same manner and to the same extent as a judgment duly rendered by any district court and docketed in the office of the clerk.
Contributions are a lien upon the property of any employer liable for the contribution required to be collected who shall sell out his business or stock of goods or shall quit business, if the employer fails to make a final report and payment on the date subsequent to the date of selling or quitting business on which they are due and payable as prescribed by the commission.
If any person liable to pay any contribution or benefit overpayment neglects or refuses to pay the same after demand, the amount, including any interest, additional amount, addition to contributions, or assessable penalty, together with any additional accruable costs, shall be a lien in favor of the Department of Employment Security of the Industrial Commission upon all property and rights to property, whether real or personal belonging to the person.
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