(a) Notwithstanding any other provision of law, the following shall apply regarding assignment of rates and transfers of experience:
(1) If an employer transfers its trade or business, or a portion thereof, to another employer and, at the time of the transfer, there is any common ownership, management, or control of the two (2) employers, then the unemployment experience attributable to the transferred trade or business, or portion thereof, shall be combined with the employer to whom the business is transferred. The combining of experience and recalculation of applicable employer tax rates shall be made effective the first day of the calendar quarter following the date of transfer of the trade or business, or portion thereof. The transfer of some or all of an employer's workforce to another employer shall be considered a transfer of trade or business, or portion thereof; and
(2) If following a transfer of experience under subdivision (a)(1) of this section or transfer of experience as otherwise provided in this chapter involving only a portion of a trade or business, the Director of the Division of Workforce Services determines that a substantial purpose of the transfer was to obtain a reduced liability for contributions, then the experience rating accounts of the employers involved shall be combined into a single account and a single rate assigned to such an account effective the first day of the calendar quarter following the date of transfer.
(b) Whenever a person is not an employer under this chapter at the time it acquires the trade or business of an employer, the unemployment experience of the acquired business shall not be transferred to that person if the director finds that that person acquired the business solely or primarily for the purpose of obtaining a lower rate of contributions. Instead, that person shall be assigned the new employer rate under this chapter. In determining whether the business was acquired solely or primarily for the purpose of obtaining a lower rate of contributions, the director shall use objective factors that may include the cost of acquiring the business, whether the person continued the business enterprise of the acquired business, how long that business enterprise was continued, or whether substantial numbers of new employees were hired for performance of duties unrelated to the business activity conducted prior to acquisition.
(c)
(1) Knowing violations or attempted violations of subsection (a) or subsection (b) of this section or any other provision of this subchapter related to determining the assignment of a contribution rate shall result in an additional two-percent rate increase for the rate year during which the violation or attempted violation occurred and a two-percent additional rate increase in each of the following three (3) rate years. In addition to the rate increases, a penalty of ten percent (10%) of total taxes due shall also be assessed in each of these rate years. All penalty amounts shall be deposited and credited to the Division of Workforce Services Special Fund as set out in § 11-10-716. The additional tax and penalty required by this subsection shall not be credited to the separate account of any employer, nor shall any employer whose contribution rate has been affected by this subsection be eligible to make a voluntary payment pursuant to § 11-10-705(c).
(2) If a person knowingly advises another person in a way that results in a violation of subsection (a) or subsection (b) of this section, the person shall be subject to a penalty of five thousand dollars ($5,000) plus ten percent (10%) of the total taxes due from the person violating subsection (a) or subsection (b) of this section for any rate year in which a violation occurred. All penalty amounts shall be deposited and credited to the fund as set out in § 11-10-716.
(3) The rate increases and penalties set forth in this subchapter along with any interest that may accrue as a result of these rate increases and penalties shall be in addition to any other rate increases, penalties, and interest provided in this chapter and shall be subject to collection as provided for in §§ 11-10-716 — 11-10-722.
(4) As used in this section, “knowing” and “knowingly” mean having actual knowledge of or acting with deliberate ignorance or reckless disregard for the prohibition involved.
(5) As used in this section, “violations or attempted violations” and “violates or attempts to violate” include, but are not limited to, intent to evade, misrepresentation, or willful nondisclosure.
(6)
(A) In addition to the rate increases and penalties imposed by subdivision (c)(1) of this section, any person in violation of this section who knowingly evades or defeats or attempts to evade or defeat the payment of any unemployment insurance tax, penalty, or interest due under this subchapter shall be guilty of a Class C felony.
(B) In addition to the penalties imposed by subdivision (c)(2) of this section, any person who knowingly assists a person in evading or defeating or attempting to evade or defeat the payment of any unemployment insurance tax, penalty, or interest due under this subchapter shall be guilty of a Class C felony.
(d) The director shall establish procedures to identify the transfer or acquisition of a business for purposes of this section.
(e) As used in this section:
(1) “Person” has the meaning given that term by section 7701(a)(1) of the Internal Revenue Code of 1986; and
(2) “Trade or business” shall include the employer's workforce.
(f) This section shall be interpreted and applied in such a manner as to meet the minimum requirements contained in any guidance or regulations issued by the United States Department of Labor.
(g) If this section and § 11-10-710 could both be applied to a transfer or attempted transfer of experience, this section shall take precedence and be applied to the transfer or attempted transfer.