Ariz. Admin. Code § 6-3-1717

Current through Register Vol. 30, No. 24, June 14, 2024

Section R6-3-1717 - Special Provisions for Reimbursement Employers

A. Reimbursement for benefits paid. The amount of benefits chargeable against or reimbursable from each base-period employer shall bear the same ratio to the total benefits paid to an individual as the base-period wages paid to the individual by the employer bear to the total amount of base-period wages paid to the individual by all his base-period employers. The provisions of sections 23-727, 23-773, and 23-777 which relieve an employer's account of charges for benefit payments do not apply to reimbursement employers. A reimbursement employer shall reimburse the Department for its proportionate share of all regular benefits and 1/2 of its proportionate share of all extended benefits paid which were based upon wages paid during the effective period of the employer's election to make payments in lieu of contributions; chargeable benefits paid based upon wages paid during a period when no such election is in effect shall be charged to the employer's experience rating account.

B. Acquisition of a business

1. When a regular employer acquires the entire business of a reimbursement employer, all benefits paid which were based upon wages paid after the date of acquisition shall be charged to the successor's experience rating account. Benefits paid which were based upon wages paid prior to the date of acquisition shall be reimbursed to the Department by the predecessor.

2. When a reimbursement employer acquires the entire business of a reimbursement employer, all benefits paid which were based upon wages paid after the date of acquisition shall be reimbursed to the Department by the successor. Benefits paid which were based upon wages paid prior to the date of acquisition shall be reimbursed to the Department by the predecessor.

3. When a reimbursement employer acquires the entire business of a regular employer, all benefits paid which were based upon wages paid after the date of acquisition shall be reimbursed to the Department by the successor. Benefits paid which were based upon wages paid prior to the date of acquisition shall be charged to the predecessor's experience rating account.

4. When an employing unit eligible for reimbursement option reorganizes or changes ownership other than in a manner as provided for in paragraph (1), (2) or (3) above, the option of the predecessor shall be binding upon the successor.

5. A successor employer shall be liable for any unpaid amounts due from a predecessor reimbursement employer when the total business is acquired in the same manner and to the same extent as a successor employer is liable for unpaid contributions, penalties, and interest of a predecessor.

C. Reimbursement required when a request for redetermination is pending. When a reimbursement employer files a timely application for redetermination of payments due and no redetermination has been received on or before the 30th day after the billing for that quarter(s) was mailed by the Department, the employer shall pay the bill before the delinquent date, and at the same time may give notice to the Department that all or part of the payment is made under protest.

D. Group accounts

1. Group accounts shall become effective only at the beginning of a calendar year, and applications for a group account shall be made no later than 30 days prior to the effective date of such account.

2. Employers forming a group account shall remain reimbursement employers for not less than three years from the effective date of the group account without regard to the date they originally became reimbursement employers. A group account shall be terminated only at the end of a calendar year by written application made not later than 30 days prior to the date the account is to be terminated, provided the group account has been in effect for three calendar years.

3. A new employer may be added to a group account only at the beginning of a calendar year and only by making written application not later than 30 days prior to the beginning of the calendar year for which the application is to be effective.

4. A member may withdraw from a group account only at the end of a calendar year and only by making written application to do so not later than 30 days prior to the effective date of the withdrawal, provided the group account will have been in existence for at least three calendar years as of the effective date of the withdrawal.

5. The employees and wages paid in each unit of a group account shall be separately identified on the quarterly wage report submitted for the group.

E. Effective date of election for payment in lieu of contributions

1. When a nonprofit organization has been granted exempt status by the Internal Revenue Service under section 501(c)(3) of the Internal Revenue Code and, after providing the Department with a copy of the exempt determination, is determined to be a liable employer according to A.R.S. § 23-613(A)(2)(c), the effective date of a timely election to make payment in lieu of contributions shall be the effective date of the exempt status as determined by the Internal Revenue Service or the effective date of coverage, whichever is later.

2. When a nonprofit organization previously determined to be a liable employer on a basis other than A.R.S. § 23-613(A)(2)(c), provides the Department with a copy of a determination issued by the Internal Revenue Service granting exempt status to the organization under section 501(c)(3) of the Internal Revenue Code, which eliminates the liability of the organization under the Employment Security Law, the liability of the employing unit shall be removed effective with the effective date of the exempt status as determined by the Internal Revenue Service. The employing unit shall be eligible for refund or adjustment within the limitations provided by A.R.S. § 23-742.

3. When a nonprofit organization previously determined to be a liable employer on a basis other than A.R.S. § 23-613(A)(2)(c), provides the Department a copy of a determination issued by the Internal Revenue Service granting exempt status to the organization under section 501(c)(3) of the Internal Revenue Code within 90 days of the date issued, and remains a liable employer according to A.R.S. § 23-613(A)(2)(c), the effective date of a timely election to make payment in lieu of contributions shall be the effective date of exempt status as determined by the Internal Revenue Service. If, however, such an organization does not provide the Department a copy of the exempt determination within 90 days, the effective date of a timely election to make payment in lieu of contributions shall be the first day of the calendar quarter in which the copy of the exempt determination is received by the Department. Payment of contributions because evidence of exempt status had not been furnished to the Department by the organization shall not be considered due to the fault or mistake of the Department.

Ariz. Admin. Code § R6-3-1717

Former Regulation 40-15; Amended effective January 10, 1977 (Supp. 77-1). Amended subsection (E) effective August 28, 1980 (Supp. 80-4). Typographical correction to change "on" to "or" as adopted by the Department (Supp. 94-4).