Bill Text: MI HB6589 | 2017-2018 | 99th Legislature | Introduced

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Bill Title: Employment security; other; severance pay; exclude from definition of remuneration. Amends sec. 44 of 1936 (Ex Sess) PA 1 (MCL 421.44). TIE BAR WITH: HB 6588'18

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2018-12-11 - Bill Electronically Reproduced 12/06/2018 [HB6589 Detail]

Download: Michigan-2017-HB6589-Introduced.html

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HOUSE BILL No. 6589

 

 

December 6, 2018, Introduced by Reps. Hertel, Clemente, Hammoud, Lasinski, Gay-Dagnogo, Geiss, Wittenberg, Greig and Camilleri and referred to the Committee on Commerce and Trade.

 

     A bill to amend 1936 (Ex Sess) PA 1, entitled

 

"Michigan employment security act,"

 

by amending section 44 (MCL 421.44), as amended by 2015 PA 240.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 44. (1) "Remuneration" means all compensation paid for

 

personal services, including commissions and bonuses, and except

 

for agricultural and domestic services, the cash value of all

 

compensation payable in a medium other than cash. Any remuneration

 

payable to an individual that has not been actually received by

 

that individual within 21 days after the end of the pay period in

 

which the remuneration was earned, shall, for the purposes of

 

subsections (2) to (5) and section 46, be considered to have been

 

paid on the twenty-first day after the end of that pay period. If

 

back pay is awarded to an individual and is allocated by an

 

employer or legal authority to a period of weeks within 1 or more

 

calendar quarters, the back pay shall be considered paid in that

 

calendar quarter or those calendar quarters for purposes of section

 

46. The reasonable cash value of compensation payable in a medium

 

other than cash shall be estimated and determined in accordance

 

with rules promulgated by the unemployment agency. Remuneration

 

includes tips actually reported to an employer under section

 

6053(a) of the internal revenue code, 26 USC 6053(a), by an

 

employee who receives tip income. Remuneration does not include

 

either any of the following:

 

     (a) Money paid an individual by a unit of government for

 

services rendered as a member of the National Guard of this state,

 

or for similar services to another state or the United States.

 

     (b) Money paid by an employer to a worker under a supplemental

 

unemployment benefit plan consistent with the criteria for a

 

supplemental unemployment benefit plan as described in Internal

 

Revenue Service publication Publication 15-A, employer's

 

supplemental tax guide, Employer's Supplemental Tax Guide,

 

regardless of whether the benefits are paid from a trust or by the

 

employer.

 

     (c) Money paid under section 5 of the relocation, closing, and

 

mass layoff severance pay act, by an employer to an eligible

 

employee, as that term is defined in section 3 of the relocation,

 

closing, and mass layoff severance pay act.

 

     (2) "Wages", subject to subsections (3) to (5), means

 

remuneration paid by employers for employment and includes tips

 

actually reported to an employer under section 6053(a) of the

internal revenue code, 26 USC 6053(a), by an employee who receives

 

tip income. If any provision of this subsection prevents this state

 

from qualifying for any federal interest relief provisions provided

 

under section 1202 of title XII of the social security act, 42 USC

 

1322, or prevents employers in this state from qualifying for the

 

limitation on the reduction of federal unemployment tax act credits

 

as provided under section 3302(f) of the federal unemployment tax

 

act, 26 USC 3302, that provision is invalid to the extent necessary

 

to maintain qualification for the interest relief provisions and

 

federal unemployment tax credits.

 

     (3) For the purpose of determining the amount of contributions

 

due from an employer under this act, wages are limited by the

 

taxable wage limit applicable under subsection (4). For this

 

purpose, wages exclude all remuneration an employing unit pays to

 

an individual that exceeds the taxable wage limit on which

 

unemployment taxes were paid or were payable in this state and in

 

any other states for that employee by the employing unit within

 

that year. If a successor employing unit becomes a transferee

 

during a calendar year in a transfer of business, as defined in

 

section 22, of a predecessor employing unit and immediately after

 

the transfer employs in his or her trade or business an individual

 

who immediately before the transfer was employed in the trade or

 

business of the predecessor, then for the purpose of determining

 

whether the successor has paid remuneration with respect to

 

employment equal to the taxable wage limit to that individual

 

during the calendar year, any remuneration with respect to

 

employment paid to that individual by the predecessor during the

calendar year and before the transfer shall be considered as having

 

been paid by the successor.

 

     (4) The taxable wage limit for each calendar year is $9,500.00

 

in the calendar years 1986 through 2002, and $9,000.00 for calendar

 

years after 2002 and before 2012, or the maximum amount of

 

remuneration paid within a calendar year by an employer subject to

 

the federal unemployment tax act, 26 USC 3301 to 3311, to an

 

individual with respect to employment as defined in that act that

 

is subject to tax under that act during that year for each calendar

 

year, whichever is greater. For calendar years beginning 2012, the

 

taxable wage limit is $9,500.00, but if at the beginning of a

 

calendar quarter the balance in the unemployment compensation fund

 

equals or exceeds $2,500,000,000.00 and the agency projects that

 

the balance will remain at or above $2,500,000,000.00 for the

 

remainder of the calendar quarter and for the entire succeeding

 

calendar quarter, the taxable wage limit for that calendar quarter

 

and the succeeding calendar quarter is $9,000.00 for an employer

 

that is not delinquent in the payment of unemployment

 

contributions, penalties, or interest. For calendar years beginning

 

2016, if on June 30 of the preceding year the balance in the

 

unemployment compensation fund equals or exceeds $2,500,000,000.00

 

and the agency projects that the balance will remain at or above

 

$2,500,000,000.00 for the succeeding calendar quarter, the taxable

 

wage limit for the calendar year is reduced to $9,000.00 for an

 

employer that is not delinquent in the payment of unemployment

 

contributions, penalties, or interest. If the unemployment

 

compensation fund balance on June 30 or the agency projection does

not meet these conditions, the $9,500.00 taxable wage limit applies

 

to all employers in the next calendar year. For purposes of this

 

subsection, an employer is delinquent in the payment of

 

unemployment contribution, penalties, or interest if the employer

 

has a quarterly unpaid balance of $25.00 or more, unless 1 or more

 

of the following apply:

 

     (a) The employer has filed a timely protest or appeal of the

 

notice of assessment and the assessment has not become final.

 

     (b) Within 45 days after the beginning of the first calendar

 

quarter in which the reduced taxable wage base limit takes effect

 

for nondelinquent employers, all outstanding balances owed to the

 

unemployment agency are paid in full.

 

     (c) If the employer is a domestic employer, all applicable

 

contributions, interest, and penalties are paid on or before the

 

date specified by the agency under section 13(1).

 

     (5) For the purposes of this act, the term "wages" does not

 

include any of the following:

 

     (a) The amount of a payment, including an amount paid by an

 

employer for insurance or annuities or into a fund, to provide for

 

such a payment, made to, or on behalf of, an employee or any of the

 

employee's dependents under a plan or system established by an

 

employer that makes provision for the employer's employees

 

generally, or for the employer's employees generally and their

 

dependents, or for a class or classes of the employer's employees,

 

or for a class or classes of the employer's employees and their

 

dependents, on account of retirement, sickness or accident

 

disability, medical or hospitalization expenses in connection with

sickness or accident disability, or death.

 

     (b) A payment made to an employee, including an amount paid by

 

an employer for insurance or annuities, or into a fund, to provide

 

for such a payment, on account of retirement.

 

     (c) A payment 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 6 calendar months following the

 

last calendar month in which the employee worked for the employer.

 

     (d) A payment made to, or on behalf of, an employee or the

 

employee's beneficiary from or to a trust described in section

 

401(a) of the internal revenue code of 1986, 26 USC 401(a), that is

 

exempt from tax under section 501(a) of the internal revenue code

 

of 1986, 26 USC 501(a), at the time of the payment, unless the

 

payment is made to an employee of the trust as remuneration for

 

services rendered as an employee and not as a beneficiary of the

 

trust, or under or to an annuity plan which, at the time of the

 

payment, is a plan described in section 403(a) of the internal

 

revenue code of 1986, 26 USC 403(a), or under or to a bond purchase

 

plan that at the time of the payment, is a qualified bond purchase

 

plan described in former section 405(a) of the internal revenue

 

code.

 

     (e) The payment by an employer, without deduction from the

 

remuneration of the employee, of the tax imposed upon an employee

 

under section 3101 of the federal insurance contributions act, 26

 

USC 3101.

 

     (f) Remuneration paid in any medium other than cash to an

employee for service not in the course of the employer's trade or

 

business.

 

     (g) A payment, other than vacation or sick pay, made to an

 

employee after the month in which the employee attains the age of

 

65, if the employee did not work for the employer in the period for

 

which the payment is made.

 

     (h) Remuneration paid to or on behalf of an employee as moving

 

expenses if, and to the extent that, at the time of payment of the

 

remuneration it is reasonable to believe that a corresponding

 

deduction is allowable under section 217 of the internal revenue

 

code of 1986, 26 USC 217.

 

     Enacting section 1. This amendatory act does not take effect

 

unless Senate Bill No.____ or House Bill No. 6588 (request no.

 

06828'18) of the 99th Legislature is enacted into law.