Original Notice.

Preproposal statement of inquiry was filed as WSR 99-19-066.

Title of Rule: Requirements for election of unemployment insurance coverage.

Purpose: To clarify the rule in light of Governor Locke's Executive Order 97-02 and to add two new sections to the rule which handled the disapproval and cancellation rights of the department for voluntary election coverage of unemployment insurance in order to preserve the integrity of the UI trust fund.

Statutory Authority for Adoption: RCW 50.01.010 and chapters 50.04 and 50.24 RCW.

Statute Being Implemented: RCW 50.04.165 and 50.24.160.

Summary: 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.

Reasons Supporting Proposal: The proposed regulations will clarify these situations for employers.

Name of Agency Personnel Responsible for Drafting: George Mante, 212 Maple Park, Olympia, WA 98507, (360) 902-9642; Implementation and Enforcement: Dale Ziegler, 212 Maple Park, Olympia, WA 98507, (360) 902-9303.

Name of Proponent: Employment Security Department, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: This rule is being revised in accordance with Governor Locke's Executive Order 97-02 which requires a complete review of agency rules, policies and procedures. This particular rule sets forth the conditions upon which an entity may apply for election of unemployment insurance coverage with the status program of the UI tax administration branch of the department. In order to preserve and protect the integrity of the UI trust fund we have added two new sections to the original rule. These sections cover the disapproval and cancellation of voluntary election coverage of unemployment insurance in those instances where there might be cases which could damage the trust fund.

Proposal Changes the Following Existing Rules: See explanation above concerning the addition of two new sections to the rule to preserve and protect the UI trust fund.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The proposed rules will not impact businesses in particular industries as defined in chapter 19.85 RCW, but will impact all industries equally. In addition chapter 19.85 RCW (RCW 19.85.025(3) applies below).

Section 201, chapter 403, Laws of 1995, applies to this rule adoption. The proposed rules will meet the intent of RCW 34.05.310. Public access will be through hearings and solicitation of comment from select stakeholders.

Hearing Location: Employment Security Department, Office of Staff Development, Room 1, ESD Annex, 106 Maple Park, Olympia, WA 98504, on December 28, 1999, at 10:00 a.m.

Assistance for Persons with Disabilities: Contact George Mante by December 23, 1999, (360) 902-9642.

Submit Written Comments to: George Mante, Tax Reform Coordinator, UI Tax Administration, P.O. Box 9046, Olympia, WA 98507-9046, fax (360) 902-9556, by December 23, 1999.

Date of Intended Adoption: December 24 [29], 1999.

November 15, 1999

Carver Gayton

Commissioner

Registering for Unemployment Insurance Taxes
NEW SECTION
WAC 192-300-170
Requirements for election of unemployment insurance coverage.

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:

(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.

[]

Reviser's note: The typographical error in the above section occurred in the copy filed by the agency and appears 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