SCS/HS/HB 1368 - This act would make three basic changes to employment law:

1. Streamline employment security programs and services, including a revision of the successor employer liabilities section (similar to SB 804);

2. Changes the minimum amount of unemployment compensation overpayments that are required to be processed in order to prevent the administrative costs from exceeding the amount recovered (similar to SB 783); and

3. Defines "limited liability company".

More specifically, the above changes are as follows:

1. STREAMLINING.

The definition of employment office includes any location designated by the state as part of the one-stop career system. Section 288.030.

Payments to an employee's cafeteria plan are not treated as wages, if it would not be treated as wages under the Federal Unemployment Tax Act (FUTA). Section 288.036.

A claimant for waiting week credit or benefits who left work voluntarily without good cause would not be disqualified, if the deputy finds that the individual left work which would have been determined not suitable, within 28 days of the first day worked. This is designed to promote flexibility in placing claimants. If the deputy finds that a claimant is not disqualified, no benefits shall be charged to the employer for wages paid prior to the date of the quit. Section 288.050.

Any employer is deemed an interested party who has experienced a job separation by a claimant during a claims series. Section 288.070.

Removes provision which exempts employers and employing units whose employees are not subject to Chapters 287 and 288, RSMo, from paying taxes under these sections. Section 288.114.

SUCCESSOR EMPLOYER LIABILITIES, SECTION 288.110. The entire section regarding successor employer liabilities is removed and is replaced with the following, effective 1/1/97:

a. A business is deemed transferred under Chapter 288, RSMo, if an employer's asset or liability activity is transferred, even in part, to another employer or employing unit.

b. The transferee is deemed a successor if the Division of Employment Security determines that substantially the same interests own or control the predecessor and successor businesses at the time of the transfer. Ownership by the same interest shall be considered substantially the same if 50% or more of the successor's business entity is owned or controlled by the individuals or entities immediately preceding the change of ownership, and the successor has continued or resumed the predecessor's business. Ownership of the business entity is by individual with the same interest, which includes a spouse, child or parent.

c. Any successor which was not an employer at the time of transfer, shall make contributions for the rest of the year at the same rate as the predecessor. In the case of multiple predecessors with different rates, the Division shall calculate a contribution rate for the successor. If the successor is an employer prior to the transfer and the contribution rates differ between successor and predecessor, the Division shall recalculate the contribution rate for the successor employer.

d. When the Division decides that the successor stands in the position of a predecessor employer, the successor shall take over and continue the predecessor's account, and the predecessor and successor shall be jointly and severally liable for any amounts owed by the predecessor to the division.

e. If only a portion of the predecessor's business assets and liability activity are transferred, the successor stands in the place of the predecessor, and shall receive a proportionate share of the predecessor's account, actual contribution and benefit experience and annual payroll. The predecessor remains liable for contributions, payments in lieu of contributions, interest and penalties. Joint and severable liability exists for a proportionate share, but no business entity shall be liable to the Division for liabilities not determined to be a part of the transfer.

TIME LIMITS. The 15-day time limits for filing appeals and other deadlines in sections 288.100, 288.113, 288.130, 288.190 and 288.200, are changed to 30 days.

Employing units currently must keep payroll and other records for at least five years. This act decreases it to 3 years. Section 288.130.

Applications for adjustment of subsequent contribution payments, under subsection 4, may be made no later than three years after the date on which any contributions would have been required to be paid if due (current law says four years). Section 288.140.

The deadline for serving certain penalties on employers is changed from 5 years to 3 years. Section 288.160.

2. UNEMPLOYMENT COMPENSATION FUND OVERPAYMENTS. SECTIONS 288.380, 347.187, 351.488 AND 358.150.

Currently, the Division of Employment Security may elect not to process certain overpayments of five dollars or less. This bill would change the amount to 20% of the maximum state weekly benefit amount in effect at the time of discovery of the error or omission, which today would be about $25. The average cost of establishing an overpayment was $19.51 in 1992-1994. The intent of this is to prevent the administrative costs from exceeding the amount recovered.

An administratively dissolved corporation applying for reinstatement would be required to certify that all liabilities owed pursuant to Chapter 288, RSMo (Employment Security) have been paid or that a payback plan has been arranged.

Under current law, while a partner of a limited liability partnership is not liable for any debts, obligations and liabilities of the partnership, the partner is liable for the partner's own acts and those under the partner's direct supervision, and any taxes or fees administered by the Department of Revenue. This act would include liabilities owed to the Division of Employment Security.

3. "LIMITED LIABILITY COMPANY" DEFINED, SECTION 347.015.

This act also adds the definition of "limited liability company", which is defined as a legal entity that is an unincorporated organization having two or more members and organized pursuant to or subject to Chapter 347, RSMo. This act also adds to the definition of "person", in the same section, employee stock ownership trusts and any other legal entity.
MARGARET TOALSON

SA 1 (MCKENNA) - REMOVES SECTION 288.110 DEALING WTIH THE LIABILITY OF SUCCESSOR EMPLOYERS AND THE DELAYED EFFECTIVE DATE FOR THAT SECTION FROM THE BILL. SA 2 (HOUSE) - DEFINES THE TERM CORPORATION AS USED IN SECTION 327.401. SA 3 (CASKEY) - REQUIRES CERTAIN INSURANCE COMPANIES TO PROVIDE LIMITED LIABILITY COMPANIES WITH THE OPTION OF INSURING ONLY THEIR EMPLOYEES. SA 4 (KLARICH) - A PARTY SUBJECT TO AN APPEALS COURT DECISION IN A WORKERS' COMPENSATION CLAIM SHALL BE NOTIFIED THAT SUCH DECISION IS PRESUMTIVELY CONCLUSIVE AND IS ENTITLED TO COUNSEL.