Subject of Possible Rule Making: Requirements for election of unemployment insurance coverage.

Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 50.01.010, 50.04.165, and 50.24.160.

Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: This is a revised rule created due to the examination of existing policies and procedures in accordance with Governor Locke's Executive Order 97-02. This rule was written in order to take an existing rule of the UI Tax Administration's Status Program and develop a rule incorporating two new sections to handle disapproval and cancellation of voluntary election coverage of unemployment insurance in order to preserve the integrity of the UI Trust Fund. These new sections significantly tighten the regulation to prohibit and/or discourage possible cases that could damage the Trust Fund.

Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: None that are known at this time for state agencies, the federal Department of Labor has regulations in this area.

Process for Developing New Rule: Informal meetings with stakeholders and interested parties.

Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication by contacting George Mante, UI Tax Regulatory Reform Coordinator, UI Tax Administration, Employment Security Department, P.O. Box 9046, Olympia, WA 98507-9046, fax (360) 902-9556.

September 14, 1999

Carver Gayton

Commissioner

The department has to make timely and accurate employer liability determinations and unemployment insurance payments. It is under RCW 50.04.165 and RCW 50.24.160 that we establish the election of coverage for unemployment insurance by employers where personal services are not considered employment:

(1) RCW 50.24.160 allows any business to file a request for election of unemployment insurance coverage for personal services not covered as employment.

(a) the request must be in writing to the department;

(b) the department must approve the request for election of coverage in writing; and

(c) the request must be signed by someone legally authorized to bind the business.

(2) RCW 50.04.165 allows a corporate employer to elect to cover the personal services of its' corporate officers for unemployment insurance coverage:

(a) a corporate employer must submit a written request for voluntary coverage signed by a person authorized to legally bind the corporation. The department must receive this request no later than thirty days prior to the end of the quarter in which the change is to begin;

(b) corporate officer is defined in RCW 23A.08.470;

(c) corporate officers appointed under RCW 23.B.08.400, other than those covered by Chapter 50.44, are not considered services in employment unless the corporation elects coverage of all its corporate officers under RCW 50.04.165;

(d) all services of corporate officers are considered exempt until the effective date of approval of election of coverage by the department; and

(e) corporate officers are exempt under RCW 50.04.165 only if the employer has notified them in writing that they are ineligible for unemployment insurance benefits, The exemption becomes effective with the date of the written notice. The written notice must:

(2)(e)(i) have the name(s) of the officer(s) who is/are being exempted;

(ii) have the effective date of the exemption;

(iii) have a signature of the officer(s) acknowledging receipt of the request;

(iv) be kept on file by the corporation; and

(v) be available for review by any department official upon request.

(3) If an agricultural corporate employer voluntarily covers its officers, the wages or salaries paid for such services will be used to determine the employer liability of the agricultural employer. Wages or salaries paid for service of corporate officers exempt under RCW 50.04.165 will not be used to determine liability of agricultural employers.

(4) All changes in elected coverage remain in effect for at least two calendar years. The business may terminate coverage only at the end of a calendar year. A written request by the employer must be sent to the department by January 15th following the end of the last calendar year of desired coverage.

(5) The department reserves the right to disapprove an election for unemployment insurance coverage due to:

(a) the applicant being non-liable for federal unemployment taxes (FUTA); or

(b) the seasonal nature of the occupation or industry.

(6) The department reserves the right to cancel unemployment insurance coverage for a voluntary election employer because:

(a) of nonpayment of unemployment insurance taxes, and/or failure to file an unemployment insurance tax/wage report; or(b) of misrepresentation of facts; or

(c) coverage is not used for involuntary unemployment as outlined in RCW 50.01.010.

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Reviser's note: The typographical errors in the above section occurred in the copy filed by the agency and appear in the Register pursuant to the requirements of RCW 34.08.040.
REPEALER

     The following section of the Washington Administrative Code is repealed:

WAC 192-12-025.

© Washington State Code Reviser's Office